Why Rocket Lab Stock Popped Today

Rocket Lab (NASDAQ: RKLB) stock rose 4.6% through 10 a.m. ET Tuesday after announcing the successful launch of an Electron rocket carrying an unspecified payload for an undisclosed customer.

The launch was Rocket Lab's 12th of this year, beating the company's previous record of 10 launches in a single year, set in 2023. With nearly two full months left in the year, Rocket Lab's likely to set an even bigger annual record before 2024 is ended, cementing its status as America's most prolific rocket launcher-that-is-not-named-SpaceX.

Almost no news is good news

Granted, we have no clear idea what Rocket Lab launched today... or for whom... or for how much money.

SpaceNews mused today that the "confidential commercial customer," for which Rocket Lab flew, might be satellite internet start-up E-Space, which requested a "payload permit" from the New Zealand government in September (Rocket Lab launches most of its Electrons out of New Zealand).

All Rocket Lab would tell us, though, is that the "Changes in Latitudes, Changes in Attitudes" mission launched less than 10 weeks after its customer signed the contract. In a world where most customers have to wait years between contract-signing and satellite-launching, that fact alone gives Rocket Lab an advantage over rivals such as SpaceX, United Launch Alliance, and ArianeSpace.

Is Rocket Lab stock a buy?

It's also worth pointing out that, although we don't know precisely how much revenue Rocket Lab got from Tuesday's launch, we do know... that it may not matter much.

According to data from S&P Global Market Intelligence, Rocket Lab only earns 11% gross profit margins on its rocket launches, meaning it's highly unlikely the company will earn much from launching rockets -- no matter how often it launches, or how much it charges. In contrast, Rocket Lab pulled down 25% profit margins building "space systems" (satellites, and satellite parts) for its launch customers last year, making this business twice as profitable as launch services.

Crazy as it sounds, for "Rocket" Lab, launching rockets should probably be an afterthought.

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Rich Smith has positions in Rocket Lab USA. The Motley Fool recommends Rocket Lab USA. The Motley Fool has a disclosure policy.