Author Topic: Rocket Lab (RKLB) - Finally a decent space company that we can invest in?  (Read 112352 times)

time is money

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My RKLB holding is around 20% of the portfolio. It is speculative investment but it is also asymmetric from upside/downside perspective. Market should be forward looking - however at this stage I assume there is zero potential Neutron success priced in. I like to pick up the stocks where many potential significant catalysts for the share price are not priced in. And I feel this is the case with RKLB. In terms of asymmetric risk - I would assign relatively small chance that I could loose all my invested capital. I am assuming small chance that RKLB goes bust. I would assign much higher chance that this can be a potential 1000% return in 10 years (20b $ market cap). And significantly higher chance that this is could be 500% return in 3 years (10b $ market cap). And a very high chance for 100% return within 1 year from now. Considering this - I am happy with my 20% allocation.

BicycleB

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I hope you're right, @time is money!

Bought a few more shares at today's price around $4.02, but spooked by why it keeps dropping. That and the for-me-large 3% (now 2.8%? I mean, 3.1%?) keep purchases limited.

Is it dropping because of new news? If so, what?

Or, because articles pointing out that losses have been slightly larger than predicted have been circulating? Can't find anything super recent, unsure of any correlations.

Bot-like articles discussing how recent earnings report had "11% larger losses" (an extra penny per share) compared to "expectations." Not sure if that penny represents a big trend. One article points out that RKLB has underperformed profit estimates (aka shown higher than expected losses) in 3 quarters out of the last 4. Given acquisitions and growth, not sure this is meaningful. Maybe the "stats" look bad while the underlying growth is good?

https://finance.yahoo.com/news/rocket-lab-usa-inc-rklb-223511559.html

Or, as in this slightly more analystic article, are RocketLab's falling cash reserves a legitimately worrying sign?

https://finance.yahoo.com/news/rocket-lab-usa-inc-rklb-213747433.html

Am I missing something? Worrying amounts of insider selling, for example?

Herbert Derp

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There isn’t any new news. It’s just stock prices moving around, I wouldn’t read too much into it.

Here’s a bullish article explaining how RKLB could be worth over $35 by 2030:
https://seekingalpha.com/article/4677230-rocket-lab-a-launchpad-for-high-returns

According to him, Electron was profitable last year!

Quote
As Rocket Lab is still in its early stages, it has been losing money since its inception. However, the recently posted 2023 annual report showed signs that the company is moving in the right direction. In 2023, Rocket Lab's revenues grew 16% YoY to $245.5 million, driven by an increase in launches from 9 to 10 in addition to 15% growth in the space systems segment. While that may seem like a modest increase, the company's margins improved substantially from 9% in 2022 to 21% in 2023.

So how did the company's margins more than doubled in a year? The main factor contributing to this margin expansion is improving launch economics. In 2023, Rocket Lab realized $71.8 million in launch services revenue from 10 launches, while its cost of revenue was $63.8 million. This means that the company realized around $7.1 million per launch while incurring $6.3 million in costs related to launches, which resulted in a gross margin of 11.2% for the launch services segment. This is the first time in Rocket Lab's history that its launch segment is profitable, as its margins have been negative over the years.
« Last Edit: Today at 03:42:59 AM by Herbert Derp »

 

Wow, a phone plan for fifteen bucks!