labs

Planet Labs (PL 3.58%) stock had a good start to the trading week on Monday. That’ll happen when an analyst increases their price target by more than 30%, which is what occurred before the market opened that morning. Planet Labs enjoyed an over 3% lift to its share price as a result, which outpaced the 1.1% rise of the bellwether S&P 500 (^GSPC 1.07%).

A 33% boost

The pundit responsible for the raise was Needham’s Ryan Koontz, who now feels Planet Labs is worth $16 per share; he previously placed a $12 price target on the stock. In making the change, Koontz maintained his buy recommendation on the shares.

Image source: Getty Images.

According to reports, the analyst made his change on the basis of presentations made during the company’s investor day. He wrote that management emphasized its strategic focus on satellite services arrangements. The company is also encouraged by what it expects to be rising defense budgets from governments around the world.

Given all that, Koontz raised his estimates modestly for Planet Labs’ fiscal 2027, which begins early in calendar year 2026.

Growth in the ether

Planet Labs’ main activity is the provision of detailed geographic data on Earth from a network of satellites. It’s still consistently loss-making, however, despite some impressive revenue growth. It’s therefore a risky investment, and should only be considered by investors comfortable with such plays.

After a stock skyrockets by around 500% in just 12 months, as Rocket Lab (RKLB -3.21%) has, it’s only natural to wonder if it rose too quickly, and in so doing, has become too overvalued to safely invest in.

The aerospace company has been experiencing tremendous growth in recent years, and investors remain bullish about its potential for even more growth ahead due to its larger new Neutron rocket, which will open up more opportunities for the business in the long run. But with the company’s market cap now hovering around $28 billion, has too much expected growth been priced into the stock? Could shares of Rocket Lab be due for a big decline?

Image source: Getty Images.

Rocket Lab’s stock carries an incredibly high premium

Although Rocket Lab’s business has been growing in recent years, so too have its losses. From 2021 through 2024, its revenue rose from just $62 million to more than $436 million. Its losses didn’t increase at nearly as rapid a pace, but they did rise from $117 million to $190 million.

When a company is in a rapid-growth phase, it’s not usually worried as much about keeping costs in check — the priority is the top line. In that context, short-term losses can be justifiable. But with Rocket Lab, investors are also paying a massive premium; the stock trades at close to 60 times its trailing revenue and 40 times its book value. Paying high multiples for stock can be warranted when there’s low risk and a lot of future growth expected, but Rocket Lab is far from a safe buy given its current levels and its lack of profitability.

Back in 2021, when it first went public, there was plenty of hype around Rocket Lab’s business, but it wasn’t trading at the mammoth premium that it is today.

RKLB PS Ratio data by YCharts.

The company may not be out of growth catalysts just yet

Despite the stock’s high valuation, one factor could still drive it higher: the company’s Neutron rocket. It’s a partially reusable rocket that can carry significantly larger payloads than Rocket Lab’s current Electron rocket. A successful inaugural launch will be a huge milestone for the business, which could lead to even more excitement around this already scorching-hot stock — and unlock more contract opportunities.

That event could, however, also turn into a sell-the-news moment where investors buy up the stock amid the chatter leading up to the launch, and then sell shares right when they might be around their peak, which might happen if and when a successful launch takes place. This is one of the risks with buying speculative stocks — their movements are extremely difficult to predict.

According to analysts, the stock is already heavily overvalued. The consensus 12-month price target of a little more than $42 is 27% lower than the current price. However, a successful Neutron launch could spark a wave of price-target upgrades from analysts.

Rocket Lab is a high-risk, high-potential-reward stock

This week, Rocket Lab’s stock hit a new 52-week high, proving that it’s not running out of steam just yet. And it may hold its momentum as the excitement builds around the upcoming Neutron launch. The closer that gets, the more the stock may rally.

Rocket Lab’s fundamentals, however, don’t support its inflated valuation, and the danger is that with expectations being as high as they are, there is plenty of room for disappointment and for the stock to fall significantly in value. Although it may not have peaked just yet, that doesn’t mean it’s a good buy at its current price. Unless you have a high risk tolerance, you’d probably be better off investing in a more reasonably priced growth stock than Rocket Lab.

In a week that saw the S&P 500 lose value, one stock in particular, space rocket operator Rocket Lab (RKLB 1.42%), glowed a bright shade of green as it rocketed to close the week 9.5% higher on Friday.

And I know why.

Because I was there to see it.

Image source: Rocket Lab.

Welcome to Virginia, LC-3

On Thursday morning, Aug. 28, Rocket Lab officially opened its third “launch complex” in the world, LC-3, at the Virginia Spaceport Authority’s Mid-Atlantic Regional Spaceport on Wallops Island, just off the Virginian eastern seaboard.

LC-3 will be home to Rocket Lab’s newest and biggest rocket, the 141-foot-tall, methane-and-liquid oxygen-fueled Neutron. Capable of lifting 13 metric tons to low Earth orbit, Neutron will be 43 times more powerful than its little brother (and Rocket Lab’s current only rocket), the Electron. Neutron is scheduled to make its inaugural test flight from LC-3 later this year.

Of course, all of this we already knew about Neutron. We’ve know this since Rocket Lab CEO Sir Peter Beck promised the rocket was coming, four years ago. But here are three things you probably didn’t know about Rocket Lab stock and Neutron., things I only learned myself by attending the LC-3 ribbon-cutting last week.

From MARS to Mars

As Virginia Gov. Glenn Youngkin pointed out in his opening speech before assisting with the ribbon-cutting, Neutron will be launching from a site at the Mid-Atlantic Regional Spaceport — “MARS,” the spaceport. And as CEO Beck observed, bigger rockets can send bigger payloads farther distances — including to Mars, the planet.

Rocket Lab actually already has two satellites built and ready to go to Mars, as part of the ESCAPADE science mission for the University of California Berkeley’s Space Science Laboratory and NASA. What it hasn’t had is a rocket big enough to get them there, and delays caused by trying to hitch rides on other companies’ rockets — SpaceX’s Falcon Heavy and Blue Origin’s New Glenn — have delayed the mission.

Neutron, when it’s ready, could solve that problem by giving Rocket Lab a way to get to Mars under its own power.

Targeting SpaceX

With 43 times the payload capacity of Electron, which can itself often carry multiple small satellites at a time to orbit, Rocket Lab’s Neutron rocket is often described as ideal for the deployment of Earth orbit satellite constellations. Rocket Lab’s most recent descriptions of the medium-lift rocket, however, suggest the company is preparing to compete with rivals such as SpaceX and Northrop Grumman (NOC 0.36%) in the “cargo resupply” market as well.

Resupply whom, you may ask? Well, the International Space Station is the party most obviously in need of regular resupply runs, and currently, SpaceX and Northrop Grumman are fulfilling that function. NASA has indicated openness to allowing other companies to bid on Commercial Resupply Services contracts, however, awarding one to Sierra Nevada Corporation in 2016, for example. Nearly a decade later, Sierra Nevada has yet to actually perform a resupply mission.

Seems to me that opens up a gap that Rocket Lab may soon be able to fill.

Uncle Sam is looking for a few good astronauts

Arguably the biggest reveal of last week’s LC-3 opening, though, was a heavy hint Rocket Lab dropped as to a previously unexpected aspiration: putting astronauts in orbit.

Describing the missions it hopes Neutron to perform once it starts launching, Rocket Lab named all the things we’ve already discussed — launching constellations, visiting other planets, “and eventually human spaceflight,” too.

This revives an early hope that Neutron might give NASA and other space-users a third way to send astronauts to space, in addition to SpaceX’s Crew Dragon and Boeing‘s (BA -0.54%) ill-starred Starliner.

Admittedly, Rocket Lab stopped short of giving any real detail on its plans to develop a human-rated spacecraft for Neutron to carry. Just the hint it did drop at the LC-3 opening, though, already has investors talking about what Rocket Lab’s plans might be along these lines, which could run the gamut from helping to keep space stations crewed, to sending astronauts to the moon or Mars, or even conducting space tourism around Earth.

Stay tuned. As soon as I know more, so will you.