Rocket Lab (NASDAQ: RKLB) has seen its stock fall approximately 30% over the past month, yet analysts and retail investors argue the underlying business has not deteriorated.
The sharp decline is widely attributed to capital reallocation following SpaceX’s public market debut at a staggering $2 trillion valuation.
Investors who previously used Rocket Lab as a proxy for space sector exposure have begun shifting capital directly into SpaceX shares since its IPO.
Despite the selloff, Rocket Lab retains all of its existing contracts, its full backlog, and the same growth prospects it held before SpaceX went public.
The company currently ranks 10th in a broader analysis of space stocks to consider as alternatives to direct SpaceX investment, according to Insider Monkey’s coverage.
Rocket Lab’s primary revenue driver remains the Electron rocket, a proven small-payload launch vehicle serving government agencies, defense contractors, and commercial satellite operators.
The more significant growth catalyst lies in Neutron, Rocket Lab’s next-generation launch vehicle currently under development, with management targeting a first launch sometime in 2027.
Each Neutron mission is projected to generate between $50 million and $55 million in revenue per launch, a figure that dwarfs what Electron currently produces per flight.
If Rocket Lab achieves a cadence of 20 Neutron launches per year, the rocket alone could generate between $1.0 billion and $1.1 billion annually, nearly double the company’s entire projected 2025 revenue of $602 million.
Polen 5Perspectives Small Mid Growth Strategy highlighted the stock in its fourth quarter 2025 investor letter, noting that Rocket Lab “is an end-to-end space company which engages in the development of rocket launch and control systems for the space and defense industries.”
The firm described Rocket Lab’s two operating segments, Launch Services and Space Systems, with the former providing orbital rides for small satellites via Electron, and the latter covering spacecraft components, satellite buses, and mission operations.
Polen noted that “the stock was up nearly 50% in the quarter on a strong set of earnings results and a growing backlog,” reflecting confidence in the company’s execution prior to the SpaceX-driven rotation.
Hedge fund interest in Rocket Lab remains meaningful, with 43 hedge fund investors currently holding positions in the stock according to available data.
The central debate among investors is whether the recent price weakness represents a genuine risk to the business or simply a technical repositioning event driven by the arrival of a dominant new public competitor.
With Neutron development continuing on schedule and the existing Electron manifest intact, Rocket Lab’s long-term revenue trajectory remains one of the more defined stories in the commercial space sector.
