Rocket Lab: Is SpaceX's mid-cap peer worth buying now?

SpaceX’s upcoming IPO, where the company aims to raise up to $75 billion, might not just mark the largest stock market listing in history but also reshape the entire space sector. Rocket Lab, widely viewed as the closest publicly traded peer to SpaceX, could prove to be one of the biggest beneficiaries.

On May 20, SpaceX filed Form S-1 with the U.S. Securities and Exchange Commission, officially launching the IPO process. The company is seeking a valuation of $1.75-2.00 trillion. According to Reuters, the roadshow for institutional investors is scheduled for the week of June 8, while on June 11 SpaceX plans to host a separate event for 1,500 retail investors.

Based on SpaceX’s prospectus, the company’s revenue rose 33% year over year to $18.7 billion in 2025. The Starlink satellite internet business remained the primary source of revenue, generating $11.4 billion, or 61% of total revenue. The space segment, including launch services and NASA missions, generated $4.1 billion, while the AI division contributed $3.2 billion following the integration of xAI and Grok in February.

The company reported a GAAP net loss of $4.9 billion for the year, while adjusted EBITDA was positive $6.6 billion. Starlink subscribers exceeded 10.3 million by the end of the first quarter, more than doubling year over year.

After reviewing the prospectus, analysts at New Constructs identified several significant risks. These include weak internal controls over financial reporting, plans to use 78% of IPO proceeds ($62.6 billion) to repay debt, including obligations related to xAI and X Corp., and a dual-class share structure that leaves Elon Musk with 85% of the voting power.

At the same time, Wedbush Securities analyst Dan Ives said the SpaceX IPO would be a watershed moment for both the space and tech sectors (the note was reviewed by Oninvest). In his view, the company’s total addressable market could reach $28.5 trillion. A significant portion of that opportunity is tied not only to the space business but also to AI infrastructure and orbital data centers, which SpaceX expects to begin deploying by 2028.

Rocket Lab specializes in launching small- and medium-lift rockets, including Electron and the Neutron vehicle currently under development, as well as designing and manufacturing satellite platforms.

In the first quarter, Rocket Lab’s revenue increased 63% year over year and 12% quarter over quarter to a record $200 million. The primary contribution came from the space systems segment, which accounted for 68% of revenue. The launch services segment, which generated the remaining 32% of revenue, grew 79% year over year as the company completed eight Electron and HASTE missions during the quarter, versus seven in the fourth quarter.

Rocket Lab’s order book grew to a record $2.2 billion, up 106% year over year and 20% versus the previous quarter. During the quarter, the company signed contracts for 36 launches, including five Neutron missions scheduled through 2029. The debut launch of the Neutron rocket remains planned for the fourth quarter.

The company also acquired Motiv Space Systems, a specialist in space robotics, and completed the integration of Mynaric, which makes optical communications terminals.

On May 8, Needham analyst Ryan Koontz raised his target price on Rocket Lab shares to $120 per share from $95 per share, while maintaining a “buy” rating. He attributed the revision to accelerating revenue growth, order book expansion, and confidence in the timing of Neutron’s first launch. Needham also raised its 2026 revenue forecast for Rocket Lab to $906 million from $828 million and its 2027 forecast to $1.28 billion.

On May 12, Deutsche Bank analyst Edison Yu also raised his target price to $120 per share from $73 per share and reiterated a “buy” rating. Deutsche Bank expects Rocket Lab to generate $951 million in revenue in 2026, reflecting contributions from Mynaric and growth in launch-service contracts. In its base-case scenario, the bank forecasts Rocket Lab’s revenue will reach $4.1 billion by 2031 at an enterprise value/revenue multiple of 25.

Both analysts cite potential delays or an unsuccessful Neutron test launch, the loss of major government contracts, and the possibility of additional equity offerings that dilute existing shareholders as key risks.

Rocket Lab has already raised $450 million through at-the-market offerings in the first quarter. In addition, on May 20, the company registered a new share-sale program of up to $3 billion involving 16 investment banks, including Goldman Sachs, Morgan Stanley, and BofA Securities.

The SpaceX IPO could prove a catalyst for a rerating of the entire space sector. The arrival on public markets of a company valued around $2 trillion, with transparent financial reporting and a diversified revenue structure, could attract new capital to the industry – from pension funds to retail investors, for whom space has previously been a difficult theme to get exposure to.

Rocket Lab could be among the primary beneficiaries of that influx of attention. The company remains the most vertically integrated public company in the sector, combining launch services, satellite platforms and component manufacturing, and orbital services under one roof.

However, Rocket Lab’s current valuation already reflects a significant portion of future expectations. If SpaceX goes public at a valuation of $1.75-2.00 trillion, based on expected 2026 revenue of $22-25 billion, that implies a forward EV/revenue multiple of 70-91.

Rocket Lab trades at a comparable level. With a market capitalization of about $78 billion and a consensus 2026 revenue forecast of $906-951 million, the company’s forward EV/revenue multiple stands at around 84, according to Refinitiv data as of May 22. That is one of the highest valuations among publicly traded space companies with meaningful revenue. Rocket Lab shares currently trade at a substantial premium to most industry peers, while positive EBITDA is not expected until the fourth quarter, according to Needham. As a result, Rocket Lab’s current valuation already reflects a significant portion of future expectations.

For comparison, mid-cap satellite data provider Planet Labs trades at an EV/revenue multiple of roughly 37, launch vehicle developer Firefly Aerospace at 17, lunar rover developer Intuitive Machines at 10, and spacecraft manufacturer and Mars infrastructure developer Redwire at 7.5. AST SpaceMobile stands apart with a multiple above 250, though the company remains in the precommercial phase of deploying direct-to-smartphone satellite communications, and its valuation reflects expectations for a future market more than its current operating business.

Against the backdrop of traditional aerospace companies such as TransDigm Group, HEICO, and Howmet Aerospace, which trade at EV/revenue multiples of 7-11, Rocket Lab’s valuation appears considerably more aggressive.

Investors considering Rocket Lab as a public-market bet on the growth of the space industry should weigh not only the potential sector rerating following the SpaceX IPO, but also operational risks – particularly those tied to the Neutron launch, potential shareholder dilution, and competition from SpaceX, which is projected to generate more than 20 times Rocket Lab’s revenue in 2026.

Over the last 12 months, Rocket Lab shares have gained 450%. According to MarketWatch data, 16 Wall Street analysts currently have a "buy" call on the stock, while four recommend "hold." There are no “sell” ratings. The average target price is $105 per share, implying around 30% upside.

This text is for informational purposes only and does not constitute personalized investment advice.