Rose Celine Investments
Equity Investor
Rocket Lab's valuation has gotten ahead of itself, and about $50 a share, or $30 billion, is a more sensible price. Projecting revenue several years out with strong execution and applying 20x sales is a useful check, but launching rockets is hard and demands a sufficient margin of safety; at 15x sales instead of 20x, fair value falls further. The stock may never get to $50, since stocks can stay expensive for long periods. x.com x.com x.com x.comÂ
Rocket Lab is still worth only about $50 a share, so even after a 50% decline buying it overpays. At $50 the company would cost roughly $30 billion, a reasonable price for the economics it should produce over the next several years. A business that launches rockets into space deserves a meaningful margin of safety, and discipline means refusing to overpay rather than buying simply because the stock is down. Valuation is an art, and whether it ever trades at fair value is unknowable. x.comÂ
Rocket Lab still looks ridiculously expensive at 29 times forward sales against SpaceX at 22 times, even after a 65% fall. At 22 times, Rocket Lab would be roughly $38, and SpaceX would still be the pick. SpaceX also has better forward guidance; Rocket Lab's negative adjusted EBITDA makes sales multiples the valuation yardstick. x.com x.com x.com x.comÂ
Repeated Neutron delays undermine the premium on Rocket Lab stock when execution keeps slipping. The company does not live or die by Neutron, but 50x sales was unjustified; even at 26x 2027 sales, a legitimate price suggests another 50% decline. x.com x.comÂ
Rocket Lab's bounce has room to run to $65 after buyers returned following shipment of Neutron's second stage to its Virginia launch site. A break above $65 before November 9 results remains the real test. x.comÂ
Rocket Lab's valuation already more than bakes in space data centers. At a $74B market cap, over 74 times sales, Rocket Lab had better be building more than just data centers in space. This is a call on the price, not on the underlying quality of the business. x.com x.comÂ
Rocket Lab is a company worth loving but not a buy at all at these levels, at 85x price-to-sales, worth betting against even as a retail favorite. x.com x.comÂ
Rocket Lab should see money flow back once SpaceX's rich valuation corrects. SpaceX's listing day could be sell-the-news, pulling Rocket Lab back to $90-100 at most, but at roughly 90-100x sales it is valued about the same as SpaceX at around 115x. With expected Nasdaq inclusion on June 22 and capital rotating from SpaceX into quality space stocks, a lower-high move toward the $130 target banks just raised is possible. x.com x.comÂ
Rocket Lab's roughly $80 billion valuation, including its newly announced $3 billion dilution, would require $3-4 billion in profit to be reasonable, and there is no scenario where it earns $3 billion within three years. The market can stay illogical longer than expected, so it could still run 50% before crashing 80%; the same applies to AST SpaceMobile. x.com x.comÂ
Rocket Lab is mispriced because the whole company carries an aggressive non-prime valuation when perhaps only a minority of it merits one. In a take described as devastating for Rocket Lab, the bulk of the business deserves a prime valuation and only a minority a premium non-prime one. That reverses this year's more interesting trades, where companies at prime-ish valuations held a large non-prime component. x.comÂ
Rocket Lab should double by June 2026 if SpaceX IPOs at around $1.5T, because as the clear number two with similar capabilities it is valued at only $38B, a gap that looks far too big. At $1.7T, SpaceX would trade at over 200x its roughly $8B in EBITDA, as reported on the All-In podcast, an insane multiple. x.com x.com x.comÂ
Rocket Lab and AST SpaceMobile are not buys because their sales multiples are too high, even after the selloff. Rocket Lab trades at 30x sales after a 14% drawdown, while AST SpaceMobile trades at 138x sales. x.comÂ
