Key Points
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Rocket Lab’s stock has soared nearly 250% over the past year, driven by record revenue and a surging backlog.
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The upcoming Neutron rocket could be a game changer, positioning Rocket Lab to compete directly with SpaceX.
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With shares trading at a rich multiple and the company still unprofitable, much future success is already priced in.
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Rocket Lab (NASDAQ: RKLB) has climbed from around $21 per share to more than $73 over the past year, or just shy of a 250% increase. For investors who caught the wave, it’s been an extraordinary ride. But the question now is whether Rocket Lab deserves a permanent spot in your portfolio — the kind of stock you buy on every dip and never sell.
Why Rocket Lab’s growth story is just getting started
The company posted record revenue of $602 million in 2025, up 38% year over year, with its backlog surging 73% to almost $1.9 billion. Take a look at its incredible sales growth over the past few years:
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RKLB Revenue (TTM) data by YCharts.
The company is executing, flying 21 missions last year with a 100% success rate. That helped it land a $816 million contract from the Space Development Agency. And its space systems segment — satellites and other spacecraft — has grown to roughly 67% of revenue. Rocket Lab has positioned itself as an end-to-end company for all things space.
Its most important growth driver has yet to hit the market. Neutron, its upcoming medium-lift rocket, will allow Rocket Lab to directly compete with SpaceX’s bread-and-butter rocket, Falcon 9, at a price point that works out to roughly $15 million less per launch.
Image source: Getty Images.
The risks that investors can’t afford to ignore
Of course, there are some real risks for investors. The stock run-up means that shares are now trading at about 66 times sales. That is pricey — especially considering that Rocket Lab is still operating in the red. The company lost nearly $200 million on its $602 million in sales. This is moving in the right direction, however — margins are improving — and the successful rollout of Neutron could meaningfully shift the calculus.
But that isn’t guaranteed. We’re talking about space flight here; a lot can go wrong. And if Neutron’s launch continues to be pushed off — or worse, the rocket proves to be less than reliable — Rocket Lab could be in serious trouble. Its $1.9 billion backlog might not convert to actual revenue.
The stock’s price tag means that a lot of future success has already been baked in. Still, the opportunity is huge. Elon Musk’s SpaceX is planning an IPO at a valuation of roughly $2 trillion. With a market capitalization of about $40 billion, Rocket Lab has a lot of room to grow into its valuation if it succeeds.
The bottom line
Rocket Lab is clearly a well-run company in an exciting market with a lot of opportunities ahead. Is it a buy-and-never-sell type of stock?
I think that depends on what kind of investor you are. If you have an appetite for risk and can stomach paying such a hefty premium, Rocket Lab absolutely could be. For most people, it’s too risky, and the stock is too expensive to become a sizable position in a portfolio.
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Johnny Rice has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Rocket Lab. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
