Rocket Lab Stock Plunges as Valuation Risks Eclipse Launch Pad Win

Sep 4 - Rocket Lab Corp RKLB shares slipped Wednesday, falling more than 11% in afternoon trading as investors reconsidered the company's lofty valuation.

The space launch company sparked enthusiasm just a day earlier when it announced the completion of its Neutron launch pad, a milestone that moves it closer to debuting its heavy-lift rocket. That development briefly boosted optimism that Rocket Lab could strengthen its position as a challenger to SpaceX.

Still, investors are paying closer attention to the numbers. Rocket Lab commands a market value of roughly $22 billion, supported by annual revenue near $500 million. Despite its strong backlog, the company continues to post significant losses, with nearly $200 million in negative EBITDA over the past year. Building rockets also means heavy depreciation expenses, which weigh on results.

Analysts and traders now face a balancing act: weighing Rocket Lab's long-term potential in the commercial space market against its current cash burn and the likelihood of raising funds through debt or stock sales. The opportunity looks promising, but the risks remain substantial.