Rocket Lab's Neutron Won't Launch Until 2027. Is the Stock a Buy 65% Below Its Record?
2026-10-15 23:28
•Daniel Sparks •The Motley Fool
•••• •• Axe Cap view
Rocket Lab's Delay Tests Patience and Valuations
Rocket Lab’s delayed Neutron rocket launch and stretched profitability timeline keep the stock under pressure despite strong revenue growth.
Rocket Lab’s shift of the Neutron rocket launch to 2027 highlights the pitfalls of betting on unproven tech. The manufacturing defect in the carbon composite dome isn't just a technical setback—it raises questions about execution in a capital-intensive industry with thin margins. While the Electron rocket and space system units are growing rapidly, and the $2.36 billion order backlog is encouraging, the company still struggles to turn a profit. At 35 times sales and a 65% drop from its highs, Rocket Lab looks priced for perfection, yet the path to cash flow positivity now creeps to 2029. For South African investors, this means watching USD/ZAR closely—any rand weakness would amplify losses on foreign exposure. Waiting for clearer signs of Neutron’s operational success or a shakeup from the Iridium deal feels prudent. this is just our opinion and not financial advice
Avoid Rocket Lab shares until they prove Neutron’s viability or profitability improves meaningfully. Focus instead on local names with steadier cash flows.
- RKLB
- USD/ZAR
- Further delays or technical issues with Neutron could push profitability further out
- Rand volatility could increase losses for SA investors holding USD-denominated stocks
6/10
Rocket Lab delayed its Neutron rocket's first launch to 2027 from Q4 2026 due to manufacturing defects found in the first-stage propellant tank's carbon composite dome. The stock fell 10% to $53, now 65% below its May record. While the company's existing Electron rocket and space systems business show strong growth with Q2 revenue up 62% year-over-year to $234 million, profitability remains elusive. Management's timeline for positive adjusted EBITDA now extends into late 2027 at earliest, pushing positive cash flow toward 2029.
Our take is based on reporting first published by The Motley Fool.