Rocket Lab stock shoots up 35% on solid Q3 revenue growth, first Neutron customer

Investing.com -- Rocket Lab USA, Inc. (NASDAQ:RKLB) shares shot up more than 35% in premarket trading Wednesday after the company reported its third-quarter earnings and announced news of the first customer for its upcoming Neutron rocket.

The space infrastructure firm reported quarterly revenue of $104.8 million, marking a 55% increase from $67.6 million in the same quarter last year and surpassing Wall Street’s forecast of $102 million, as per LSEG analysts.

Meanwhile, Rocket Lab’s net loss widened to $51.9 million from $40.6 million year-over-year, though its 10-cent loss per share was slightly better than analysts’ prediction of an 11-cent loss per share.

For the fourth quarter, Rocket Lab projects revenue between $125 million and $135 million, setting the company on track for approximately $430 million in annual revenue at the midpoint.

The company also announced its first Neutron rocket launch contract, secured with a “confidential commercial satellite constellation operator” for two missions scheduled for mid-2026.

Rocket Lab stated that the contract price aligns “consistent with our target” for Neutron, which has been previously set at around $50 million per launch.

“With Neutron on track, the company is now exposed to more meaningful launch opportunities across a growing number of satellite constellations,” Stifel analyst Erik Rasmussen said in a note, reiterating a Buy rating on RKLB stock, and raising the price target to $22 from $15.

“Business fundamentals continue to improve, and now with the booking of its first launch contract for Neutron, there is increased confidence in its ability to hit its time frame for its first test flight in mid-2025,” he added.

Much of Rocket Lab’s revenue growth in Q3 stemmed from its Space Systems division, which manufactures spacecraft and supplies satellite components.

The division generated $83.9 million in revenue, up from $46.3 million the previous year, while the Launch division contributed $21 million, close to its $21.3 million total a year ago.

“Space Systems continues to grow rapidly and management sees pathways for both organic and inorganic opportunities to further scale the business,” KeyBanc Capital Markets analysts commented.

“RKLB's end-to-end, vertically integrated model is what sets it apart from many peers, and this continues to be the Company's focus to strengthen its position going forward.”