Rocket Lab's stock on pace for 9-month low as launch postponement hits revenue

By James Rogers

The postponement of an Electron rocket launch impacted Rocket Lab's fourth-quarter revenue

Shares of Rocket Lab USA Inc. are down 18.3% Thursday, weighed down by the space company's preliminary fourth-quarter results, putting the stock on pace for its lowest close in nine months.

The stock is trading around $3.97, which would be the company's lowest close since May 9, 2023, when it closed at $3.94, according to Dow Jones Market Data. The decline would also mark Rocket Lab's (RKLB) largest percentage decrease since the 17.6% decline on Sept. 13, 2021, and is the company's largest decline since it completed its merger with Vector Acquisition Corp. (VAQC) on Aug. 25, 2021.

On Wednesday Rocket Lab said fourth-quarter revenue is expected to be between $59 million and $61 million, below its prior guidance of $65 million to $69 million. Revenue was impacted by the postponement of an Electron rocket launch that was previously scheduled to occur before the end of 2023, according to Rocket Lab. This, however, was partially offset by strength in Rocket Lab's Space Systems business. Analysts surveyed by FactSet are looking for revenue of $63.9 million.

Related: These are the space stocks to keep an eye on in 2024

Rocket Lab said that the postponement is not expected to impact future results.

On Wednesday Rocket Lab also announced a proposed offering of $275 million convertible notes.

Rocket Lab touts its 59-foot-high Electron as "the only reusable orbital-class small rocket." This week the company completed its first Electron launch of 2024, a space-junk focused mission for Spire Global Inc. and NorthStar Earth & Space that was launched from New Zealand. The mission was Rocket Lab's 43rd Electron launch overall. In a statement accompanying the company's preliminary fourth-quarter results, Rocket Lab CEO Peter Beck said that the company has more launches scheduled in 2024 than any prior year and a record backlog.

Related: Rocket Lab is 'one of the highest-quality space companies' in the market, analyst says

Rocket Lab is seen as well positioned for growing demand for space launches. "A lot of folks are happy and comfortable using SpaceX ... but some folks would rather not use SpaceX, and Rocket Lab has emerged as a bona fide launch provider," Justus Parmar, CEO of Fortuna Investments, a venture-capital and advisory company currently focused on space investments, told MarketWatch recently. "They have developed a strong cadence for their launches."

Parmar also expects Rocket Lab to receive a boost from its forthcoming Neutron rocket. The 141-foot-high rocket is designed for the deployment of "mega constellations" of satellites, deep-space missions and human spaceflight, according to Rocket Lab. Last year Rocket Lab CEO Beck said the company is making "steady progress" toward an anticipated launch of the Neutron rocket at the end of 2024.

Rocket Lab shares have fallen 25.7% in the last 52 weeks, compared with the S&P 500 index's SPX gain of 16.6%.

-James Rogers

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02-01-24 1049ET

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