Rocket Lab Stock Sinks. Why Its Neutron Launch Is Such a Big Deal. -- Barrons.com

By Al Root

Rocket Lab's larger rocket won't take flight until 2027. That's behind schedule. Investors aren't impressed.

The company said the inaugural launch of its larger Neutron rocket was "now expected to occur in 2027." Before the update, investors expected a launch in the fourth quarter of 2026.

Rocket Lab stock was down 10.3% at $53.11, while S&P 500 futures were down 0.3% and Dow Jones Industrial Average futures were up 0.4%.

Neutron is a bigger rocket. Rocket Lab's Electron rocket can carry about 320 kilograms to space, while Neutron will carry closer to 13,000 kilograms to low-Earth orbit. (A SpaceX Falcon 9 can carry about 23,000 kilograms to low-Earth orbit.)

A larger rocket opens up more potential business for Rocket Lab. So a delay can hit sales estimates. Currently, Wall Street expects 2027 sales of $1.4 billion, up from 2026 sales of about $960 million. (SpaceX's launch services business is expected to generate 2026 revenue of $4.5 billion.)

"We remain confident in Rocket Lab's ability to bring Neutron to the pad, and we continue to believe Neutron will materially improve the company's unit economics following the first successful launch," wrote Cantor Fitzgerald analyst Andres Sheppard in a Thursday report, adding that demand for launch services remains high.

Sheppard rates Rocket Lab shares Buy and has a $122 price target for shares, up more than 100% from Wednesday's closing price of $59.18.

Rocket Lab stock touched $151 in May, just ahead of SpaceX's record-setting IPO. Many space-related stocks rallied into that even, only to sell off after Elon Musk's rocket and AI company went public.

At the time of the SpaceX IPO, Rocket Lab shares fetched about 80 times sales expected over the coming 12 months. That multiple is down to 27 times.

The valuation is down. Time will tell if it's a good entry point for investors.

Rocket Lab isn't expected to generate positive full-year earnings and free cash flow until 2028. Wall Street projects 2030 earnings per share of $1.78, leaving shares trading for about 33 times that estimate.

That's a long way away. However things develop, Rocket Lab will need the Neutron rocket to grow its business.

Write to Al Root at allen.root@barrons.com.

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October 15, 2026 09:32 ET (13:32 GMT)