Analyst Matthew Akers from Wells Fargo maintained a Hold rating on Rocket Lab USA (RKLB – Research Report) and keeping the price target at $4.25.
Matthew Akers has given his Hold rating due to a combination of factors impacting Rocket Lab USA’s financial outlook and operational progress. While the company has made headway with their engine test progress, Akers notes that the anticipated launch of their Neutron rocket is more than a year away, which tempers immediate investor enthusiasm. Additionally, the company’s backlog has decreased sequentially, with particular reduction in the Launch backlog, suggesting potential near-term revenue challenges. Despite a solid revenue projection for the upcoming quarter, there are concerns over customer readiness possibly affecting the number of Electron launches in 2024, which could further impact the company’s financial performance.
Moreover, Akers’s assessment considers the unchanged price target based on a long-term discounted cash flow (DCF) analysis, which incorporates a high expected cash flow growth in the future. However, the current lack of upside to the 2025-26 free cash flow estimates means that there is no compelling reason to adjust the Hold rating at this time. The report also indicates that, while there are positive developments such as the progress on reusability and strong new bookings for SolAero, these are not sufficient to warrant an upgrade in the rating. Acknowledging the potential for further acquisitions with the company’s strong pipeline, Akers maintains a cautious outlook that balances Rocket Lab USA’s long-term potential against its short-term challenges.
Based on the recent corporate insider activity of 27 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of RKLB in relation to earlier this year.
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Rocket Lab USA (RKLB) Company Description:
Rocket Lab (NASDAQ:RKLB) is a space company offering launch services, spacecraft manufacturing, and other solutions, including the management of satellites. Furthermore, its space systems business manufactures spacecraft components.
