Time to Get Back Into Rocket Lab?
The long-time Sarge fave is landing government wins and approaching a key technical pivot. Here’s what to know.
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Though not in the name for more than two weeks, we are wondering if it’s time to get back into Rocket Lab (RKLB).
Sir Peter Beck’s launch services company has been a core member of the Sarge-folio, the Stocks Under $10 Portfolio and the $10,000 Portfolio. We sold our final shares in early July at $84 and change. The stock bottomed with a $64 handle last week.
On Friday night, The U.S. Space Force posted an award to seven companies to provide launch services under the third phase of the National Security Space Launch program’s Lane 1. Among the companies receiving contract modifications would be United Launch Services, Blue Origin, SpaceX (SPCX), and Rocket Lab. This will cumulatively increase the award ceiling by $11.4 billion, bringing the total cumulative face value of the aggregate contract to $17 billion from $5.6 billion.
Then on Tuesday, news broke that Rocket Lab has been awarded a U.S. Air Force $266 million firm-fixed-price completion contract for suborbital launch. This contract will provide for the launch of 12 suborbital launch vehicles, with an additional six optional launches. The amount of $112 million is obligated at the time of the award.
Earnings
Rocket Lab is set to report its second-quarter financial results late the first week of August. Wall Street is looking for an adjusted loss per share of $0.05 on revenue of roughly $231 million for the period.
If those numbers are realized, they would compare well to the adjusted loss per share $0.13 that it posted for the same period last year, while reflecting year-over-year top-line growth of about 60%. This would be the fastest year-over-year growth reported by Rocket Lab since FQ4 2024.
The Chart
Readers will see that from late May to the present, RKLB has developed a Falling Wedge pattern of bullish reversal. The stock found support at the lower trendline of the wedge for a second time last week. This makes it more than likely, in my opinion, that the shares either test their 200-day simple moving average (SMA) or the upper trendline of the wedge from below.
I would put the actual pivot at the red line ($78). Off of that setup, I would put a price target at $98, allowing the shares to fall short of their 50-day SMA should a breakout actually occur. Both Relative Strength and the daily moving average convergence divergence (MACD) are running at weak levels and could be close to making more bullish turns.
At the time of publication, Guilfoyle had no positions in any securities mentioned.
