Rocket Lab: Is It Finally Time to Buy Below $60?
Key Points
Rocket Lab is in a deep slump following an announcement that it is delaying Neutron's first flight into next year.
Delays aren't ideal, but the other factors indicate it's not a deal-breaker by any means.
Long-term investors can now buy shares at their most reasonable valuation in some time.
Rocket Lab (NASDAQ: RKLB) has fallen a long way. It touched $151 in the spring. However, it churned steadily lower before tanking to under $60 in October after announcing it had pushed the highly anticipated first launch of its Neutron rocket to 2027.
It's unfortunate, but Rocket Lab is a growing company, operating in a space industry that's only just getting started. At the same time, Rocket Lab's setback doesn't necessarily doom the company to permanent failure.
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Here's why Rocket Lab stock's steep slide could actually be the buying opportunity long-term investors have been waiting for.
The delay isn't the worst-case scenario
Despite the stock tanking on the news, I don't believe many would deny that there are worse things. The company delayed Neutron due to a defect in its propellant dome that posed a risk of catastrophic failure on the launch pad. Clearly, a delay is preferable to a rocket exploding on launch.
Image source: The Motley Fool.
Remember, this stuff is literally rocket science. Rocket Lab is going through the pains and learning process of developing rocket technology, much like Space Exploration Technologies (SpaceX) did with its Falcon rocket, and continues to experience as it develops Starship.
The demand is clearly there to make Rocket Lab a winner
Neutron would be capable of heavier loads than Rocket Lab's existing Electron rocket. Essentially, Neutron would enable Rocket Lab to compete more directly with SpaceX for medium-lift payloads, which are crucial for satellite deployments and government contracts. It seems fair to say there's a ton riding on getting Neutron into orbit.
Rocket Lab's backlog grew to $2.36 billion as of second-quarter 2026, up 137% from the prior year. It now includes over 90 launches across Electron, Neutron, and HASTE vehicles. Management anticipates recognizing approximately 45% of its backlog as revenue within the next year.
The company signed its largest commercial Electron deal ever in September, a deal with Synspective for 20 launches. If Rocket Lab can get Neutron off the ground, bookings growth could potentially accelerate.
Lower entry price, lower investment risk
Rocket Lab's sharp decline is a great example of how a stock's story and share price often move in different directions. Neutron's delay wasn't ideal, but it doesn't erase the company's backlog or meaningfully hinder its opportunity to compete with SpaceX over the long term.
Rocket Lab has a market cap of about $35 billion at its current price, valuing the stock at roughly 27 times Wall Street's revenue estimates for next year, which are approximately $1.3 billion.
That's not a jaw-droppingly low valuation, but it is the most attractive entry point Rocket Lab's stock has offered investors in months. It seems like a solid opportunity for long-term investors who have been waiting to smash that buy button.
Justin Pope 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.