Rocket Lab: Strong Momentum and Growth Potential Amidst Technical Resistance and Earnings Ahead

Technical Analysis

Rocket Lab USA, Inc. (RKLB) closed at $25.42 on May 23, 2025, down 1.55% from the previous session. The stock’s intraday range was $24.68 to $25.52, approaching key resistance at $25.57, with support established at $24.13. The 14-day RSI registers at 63, indicating mild bullish momentum but nearing overbought levels. The MACD is positive at 1.26, confirming upward trend strength over the past three months. Notably, the price remains well above the 50-day ($20.89) and 200-day ($18.17) moving averages, reinforcing a sustained medium- and long-term uptrend. Average volume (16.82 million) marginally exceeds the recent daily volume (14.25 million), suggesting somewhat subdued trading interest. The ATR of 6.25 reflects elevated volatility. A suggested short-term stop-loss level sits near $24.28, just below support.

For the next trading day (May 27), the stock may test resistance near $25.57 and could either consolidate below it or attempt a breakout depending on market reaction and volume. In the coming week, with near-term technical momentum and a positive MACD signal, a move toward the high $26 to low $27 range is probable, assuming no adverse market conditions.

Fundamental Analysis

Rocket Lab’s market capitalization stands at approximately $11.73 billion. The company is loss-making, with a trailing twelve-month EPS of -$0.41 and a negative P/E ratio of -62, reflecting continued investment in growth over profitability. The upcoming earnings announcement on August 14, 2025, will be a pivotal catalyst.

Recent quarterly results show revenue of $122.6 million for Q1 2025, a 32% year-over-year increase, with a $1.07 billion backlog supporting near-term revenue visibility. Space Systems segment accounted for 71% of Q1 revenue, driven by component sales and manufacturing innovations. The Neutron launch vehicle, central to the National Security Space Launch Phase 3 (NSSL), offers access to approximately $55 million in government contracts, bolstering top-line growth potential.

Analyst sentiment is uniformly positive with a consensus target price firmly set at $31. The majority of coverage (12 buys, 2 holds) favors accumulation given the company’s expanding backlog, growing government contract exposure, and strong positioning in the small to medium satellite launch market.

Given the current loss profile, the stock’s intrinsic value leans on future revenue scaling and profitability realization. Assuming successful commercialization of Neutron and expansion of Flatellite technology, the intrinsic value could justify the current price premium and higher, but execution risks remain. Investors focusing on long-term positioning in the aerospace launch sector may find RKLB attractive due to its technological foothold and market opportunity.

Long-Term Investment Potential

Over the long term, Rocket Lab’s growth runway appears promising, anchored by multi-billion-dollar contracts and innovation in satellite manufacturing and launch services. With the space economy expanding, RKLB’s integrated offerings and government-linked contracts provide defensible revenue sources. The negative EPS and high volatility suggest patience and risk tolerance are required, but the company’s pathway to profitability and market leadership could unlock significant shareholder value.

Overall Evaluation

RKLB currently qualifies as a Buy candidate based on strong technical support above key moving averages, positive momentum indicators, robust growth metrics, and supportive analyst consensus. The proximity to resistance suggests cautious entry or partial accumulation near current levels, with risk management needed due to lingering negative earnings and volatility. The combination of a solid backlog, government contracts, and recent revenue growth underpins a compelling growth story ahead.