Rocket Lab had its 19th successful launch this year. Why did its stock fall?

The space company Rocket Lab, which delivers cargoes to Earth's orbit on its own rockets, conducted its 19th successful launch this year, which became a record for it. At the same time, its shares collapsed by almost 10% in trading on December 15. It's not even about what exactly SpaceX competitor Elon Musk is doing: investors "buy on rumors and sell on news," analysts say.

Rocket Lab securities fell to $55.4 in Monday trading, losing 9.9% for the day, and then continued to decline another more than 1% in the aftermarket.

On Sunday, the company announced the completion of the first launch commissioned by the Japan Aerospace Exploration Agency (JAXA). The mission called RAISE And Shine, carried out on an Electron rocket, was launched from a site in New Zealand.

Rocket Lab also reported that the second launch under the JAXA program is scheduled for the first quarter of 2026. Another mission for the European Space Agency (ESA) is also due early next year.

The next, 20th Rocket Lab launch in 2025, is scheduled from Launch Complex 2 in Australia and will be announced in the coming days.

The paradox is that the reason for the fall in the value of securities was just a successful mission, writes Barron's. The publication believes that the launch has already been factored into the price of shares of Rocket Lab. At the same time, by Monday, the space company's securities had risen 141% since the beginning of the year: they are now worth about 35 times the projected revenue for 2026 (in terms of per share P/E), Barron's noted.

"Such growth is impressive, but it also means a high price for expectations. And expectations do not always grow in sync with good news on a particular day," Barron's notes.

- November 19, BofA Securities adjusted its target price on Rocket Lab shares from $50 to $60: this is 8.3% higher than the closing level of trading on Monday. The bank also reiterated a "buy" recommendation on the securities.

- On November 12, Morgan Stanley lowered its target price on shares of Rocket Lab from $68 to $67, while maintaining a Neutral rating (Equalweight). The bank explained that the space company is facing a moderate delay on its new Neutron rocket project, but demand for its Electron rockets remains strong, MarketScreener wrote.

- On November 11, Deutsche Bank raised its target price on Rocket Lab shares from $45 to $55, maintaining a "buy" recommendation on them.

In total, 12 of the 18 analysts tracking the space company's stock advise buying it, while the other six recommend holding it in a portfolio, according to MarketWatch. There are no recommendations to sell. The Wall Street consensus price target is $65.5, up 18% from the closing price on Dec. 15.

This article was AI-translated and verified by a human editor