Rocket Lab Trades at 59 Times Revenue With Neutron Still Unflown
Rocket Lab Trades at 59 Times Revenue With Neutron Still Unflown
Daniel Sparks, The Motley FoolSat, August 22, 2026 at 1:47 PM UTC
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Key Points -
Rocket Lab's market value of about $45 billion is about 59 times the roughly $769 million of revenue it generated over the trailing 12 months.
The company still targets delivering its Neutron rocket to the launch pad in the fourth quarter of 2026, but says the window for a launch this year is narrowing.
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By nearly every operating measure, Rocket Lab(NASDAQ:RKLB) is delivering. The space company's second-quarter revenue was a record. Its backlog was a record. Its third-quarter guidance calls for another record. And in June, the company announced an $8 billion agreement to acquire satellite operator Iridium Communications(NASDAQ:IRDM).
The stock reflects all of it. Even at about $73 as of this writing (roughly half its 52-week high of $151), Rocket Lab carries a market value near $45 billion. That is about 59 times the roughly $769 million of revenue the company generated over the four quarters through June 30, based on its last two earnings reports.
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To me, that is the figure to hold onto. Because the rocket anchoring the growth story behind that multiple, the medium-lift Neutron, has never flown.
Image source: The Motley Fool.
Records everywhere but the bottom line
Second-quarter revenue rose 62% year over year to $234 million, which was $34 million above the prior quarter's record. Backlog reached $2.36 billion -- up 137% year over year, and up from $1.85 billion at the end of 2025. And founder and CEO Sir Peter Beck said the company had already signed more than $1 billion in new contracts across launch and space systems since the quarter closed.
Guidance points the same direction. Management expects third-quarter revenue of $250 million to $265 million, which would be another record. And 2025's full-year revenue of $602 million grew 38% from 2024. The growth isn't cooling.
Profitability is the missing piece. Rocket Lab posted a $94 million net loss for the first half of 2026, and its guidance calls for a third-quarter adjusted loss of $17 million to $23 million in earnings before interest, taxes, depreciation, and amortization (EBITDA), with gross margins of 29% to 31% under generally accepted accounting principles (GAAP).
About $2.1 billion of cash and equivalents gives the company plenty of room to keep investing. But this remains a money-losing business valued at $45 billion.
Neutron is the revenue the price assumes
For the growth stock to trade at even 10 times revenue (still arguably a premium price for a hardware-heavy business) with shares simply holding their current value, revenue would need to reach about $4.5 billion -- nearly six times the current trailing figure.
The path there runs through Neutron, the reusable rocket designed to carry payloads far beyond what the company's small Electron vehicle can. After all, part of the new backlog depends on it, including a $397 million Space Force contract to deliver satellites that will launch on Neutron.
So the schedule matters more than usual. In its Aug. 10 second-quarter update, Rocket Lab said production of Neutron's first-stage tank remains aligned with delivering the rocket to the launch pad in the fourth quarter of 2026.
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The same day, the company acknowledged the window for a launch this year "is narrowing," saying it is "balancing the schedule of the first launch with entering Neutron into service as a system ready for full-scale production."
The first flight may well slip into 2027.
To be fair, Neutron is not the only growth lever. The Iridium acquisition would fold in an operating satellite network and its subscription revenue when it closes, which the companies expect in mid-2027. The deal values Iridium at $54 per share, with half in cash.
But that revenue isn't free. The roughly $8 billion headline value includes Iridium's debt, and the cash half of the offer relies on a $3.6 billion bridge loan, with the remainder delivered as new Rocket Lab stock. The deal adds debt and share count, as well as sales.
A valuation that assumes the next company arrives
Rocket Lab is one of the most impressive operators in the space industry, and its launch record, backlog, and contract wins are all evidence that demand for what it builds continues to grow.
However, at 59 times revenue, the market isn't pricing the $769 million company that exists today. It is pricing the company Rocket Lab intends to become, one where Neutron flies routinely, the Space Force contracts convert into revenue, and Iridium's subscribers are folded in. Those steps can all still happen, but the price only works if they do.
I'd want to see Neutron leave the ground before calling this valuation reasonable. Until then, the multiple prices at milestones the company hasn't reached yet make the stock one I'd personally pass on.
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Daniel Sparks and his clients do not have positions in any of the stocks mentioned. The Motley Fool has positions in and recommends Rocket Lab. The Motley Fool has a disclosure policy.
Source: “AOL Money”
