Depending on their timing, investors in Rocket Lab USA < NASDAQ:RKLB> might either be doing well, or deep in the red. Like it or not, RKLB stock is emblematic of the volatile nature of today’s space exploration stocks.
As you may recall, Rocket Lab shares commenced trading on the Nasdaq Exchange on Aug. 25, after the company completed a special purpose acquisition company (SPAC) merger with Vector Acquisition.
Since then, there’s been some major turbulence. Like a rocket ship on a space mission, ROB went vertical before falling back to earth.
Now, it’s time to re-assess the stock at its lower price point. Thankfully, there are news developments to suggest that Rocket Lab is at least headed in the right direction, even if the share price isn’t.
A Closer Look at RKLB Stock
Prior to Aug. 25, the stock traded under the ticker symbol VACQ. For the most part, it stayed close to the typical pre-deal SPAC stock price of $10.
Soon after the transition to RKLB stock, the buyers came out in full force. Amazingly, the share price rocketed to $21.34 on Sept. 9.
But of course, stocks can’t stay in a zero-gravity environment forever. As it turned out, traders who chased the stock near $20 were taught a harsh lesson.
By Sept. 24, the RKLB stock price was down to the $14 level. Even worse, it was threatening to fall below $13 in mid-October.
At the same time, Rocket Lab had trailing 12-month earnings per share of -$7.46.
Therefore, the long-term investors will need to have patience and faith that Rocket Lab will flip to a positive earnings profile in due time.
Out to Launch
While Rocket Lab’s earnings status could use some improvement, at least we can say that the company is rapidly advancing the science of space travel.
This is demonstrated by the fact that Rocket Lab launched three missions in the first half of 2021, followed by a fourth one in July.
Those missions brought the total number of Rocket Lab’s Electron launches to 21.
Not only that, but The Electron launch vehicle has deployed 105 satellites into orbit.
Both of those missions are scheduled to launch from Rocket Lab Launch Complex 1, located in New Zealand.
With this development, Rocket Lab CEO Peter Beck took the opportunity to mark its significance for his company, and for BlackSky as well.
“The speed to space Electron provides our customers is unmatched in the dedicated small launch industry,” Beck boasted.
“We’re thrilled to be delivering a launch service that provides assurance for BlackSky to scale their constellation and services with confidence,” the CEO added.
End-to-End Space Solutions
The new space missions will be exciting, no doubt about that.
Yet, there’s another important development happening with Rocket Lab, even if it’s not a flashy headline-grabber.
Without much fanfare, Rocket Lab finalized its acquisition of space software business Advanced Solutions.
At first glance, this might seem like a far-out move for Rocket Lab to make.
On the other hand, investors should understand that Rocket Lab is on a quest to enhance its “space systems portfolio” and to “deliver enhanced end-to-end space solutions,” according to Beck.
Buying out Advanced Solutions could help Rocket Lab to pursue these objectives.
Along with space software, Advanced Solutions provides mission simulation and test systems, as well as guidance, navigation and control (GNC) solutions.
And with this acquisition, it’s a win-win for both companies as now Advanced Solutions will have “more rocket fuel in the tank to play with,” in the words of CEO John Cuseo.
The Bottom Line
More than anything else, I’m hoping that RKLB stockholders will think long-term and stay in the trade.
SPAC stocks, and particularly space SPAC stocks, can be volatile. That’s just how it goes.
So, be prepared for the roller-coaster ride to continue.
In the meantime, check for more developments as Rocket Lab ups its launch count and fulfills its mission to deliver end-to-end space-travel services.
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On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
David Moadel has provided compelling content – and crossed the occasional line – on behalf of Crush the Street, Market Realist, TalkMarkets, Finom Group, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.
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RKLB shares were unchanged in premarket trading Monday. Year-to-date, RKLB has gained 28.39%, versus a 19.96% rise in the benchmark S&P 500 index during the same period.
About the Author: David Moadel
David Moadel has provided compelling content – and crossed the occasional line – on behalf of Crush the Street, Market Realist, TalkMarkets, Finom Group, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets. More...
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