Do you need some space?
Then Rocket Lab USA. (RKLB) can help you. Space is his specialty.
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The Long Beach, California-based space systems company is making its mark on the cosmos, and its stock price has been rising along with it.
Let's take a look at what's been happening lately.
On September 26, Rocket Lab said it had completed testing and integration of its second Pioneer spacecraft for Varda Space Industries, which is billed as the world's first in-space pharmaceutical processing and hypersonic Earth reentry logistics company.
Privately held Varda designs, builds and flies spacecraft that process pharmaceuticals in microgravity. The company targets the crystallization of small molecules, which is difficult to produce under Earth's gravity, and returns the crystals to dry land.
Rocket Lab's first Pioneer spacecraft for Varda launched last year. Varda successfully crystallized the HIV drug Ritonavir while in orbit, and the two companies landed the reentry capsule in the Utah desert in February.
“This close collaboration allows us to push the boundaries of innovation, allowing Varda to create high-value products in microgravity and bring them back to Earth,” said Rocket Lab founder and CEO Peter Beck. in a statement.
Rocket Lab CEO: “we have a clear advantage”
“We are excited to work alongside Varda as they revolutionize manufacturing processes and open new markets across space,” he said.
A few days earlier, Rocket Lab said it had launched its 53rd Electron mission and deployed five satellites into low Earth orbit for French Internet of Things (IoT) company Kinéis.
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The “Kinéis Killed the RadIOT Star” took off from Rocket Lab's Launch Complex 1 in Mahia, New Zealand.
The mission launched three months after “No Time Toulouse,” Kineis' first launch with Rocket Lab, and marks the second of five dedicated Electron launches for the French company.
Last month, Rocket Lab beat Wall Street's second-quarter earnings and revenue expectations.
The company posted a loss of 8 cents per share, compared with a loss of 10 cents per share a year ago. Revenue totaled $106 million, a record for the company and 71% more than a year ago.
Wall Street expected Rocket Lab to report a loss of 10 cents a share on $105 million in sales.
“By owning launchers and spacecraft, we have a clear advantage in establishing our own space capabilities or constellations,” Beck said. told analysts during the company's earnings call in August. “We can build and launch our own spacecraft at a cost and don't have to wait in line for limited launch capability.”
“We completely avoid the problem that most constellation operators face, being at the mercy of suppliers on costs and schedules, often causing deeply disruptive delays and bringing capacity online at scale,” he added.
The company is scheduled to report its quarterly results in November. Analysts are calling for the company to report an adjusted loss of 8 cents per share on $102.4 million in revenue.
Rocket Lab shares closed up nearly 13% on September 27 at $9.78 per share. The stock is up 77% year to date and a whopping 130.1% year over year.
The stock got a boost when KeyBanc analyst Mike Leshock raised his price target on Rocket Lab on Sept. 27 to $11 from $8, while maintaining an Overweight rating on the stock, according to The Fly.
The company hosted a no-deal roadshow with Rocket Lab and came away with greater confidence in the company's ability to scale its business.
Long-time veteran trader at Rocket Lab
Leshock said he continues to believe Rocket Lab is positioning itself to be an industry leader in both launch services and satellite manufacturing and design.
MP Securities analyst Trevor Walsh initiated coverage of Rocket Lab on September 12 with a market perform rating and no price target.
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Rocket Lab is a comprehensive space company that designs and manufactures small and medium-class rockets and specialized spacecraft, Walsh said.
The company is on the sidelines due to potential near-term risks and challenges putting pressure on the stock, but believes there are “several strong fundamentals” for Rocket Lab that could eventually lead it to be more positive on the name.
Challenges include concerns about the cost of launch, growing competition and remaining uncertainty specific to the Neutron mid-lift launch vehicle, which is currently in development, as well as financial “vulnerabilities” and the competitive threat posed by Tesla. (TSLA) CEO Elon Musk's SpaceX, the largest private space company.
Chris Versace of TheStreet Pro has been keeping an eye at Rocket Lab, writing on September 27 that “stocks have been hot this week, and now they've apparently gone somewhat parabolic…”
“I will keep this name, and probably much of it, for quite some time,” he wrote. “That said, since my price target has been surpassed, I will be removing some of my position, as that is how my code of discipline works.”
Versace, which recently raised its price target on Rocket Lab to $9.50 from $7.50, noted that KeyBanc analyst Philip Gibbs reiterated his buy rating on the company while raising his price target to $11 from $8.
“I don't have a new price target to go with yet, so we will act again if the stock somehow surpasses Gibbs' new target,” Versace said. “Until then, we hope that a new technical pattern will develop so that we can identify a new pivot point.”
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