12/24/2023 0 Comments Should i buy rocket companies stock![]() ![]() I believe Electron has now established a clear leading position in the small launch market. What’s more impressive is that Electron has a 100% mission success rate since the company went public. It also successfully caught the Electron using the helicopter and launched an Electron with pre-flown components, which are huge steps towards fully reusable rockets. Electron continues to see solid progress with 32 total launches recorded to date, including NASA's notable CAPSTONE mission to the moon last year. Rocket Lab has been seeing strong momentum with Electron and its Space Systems segment. I believe the company should be well-positioned to benefit from the market expansion. ![]() For instance, Citigroup ( C) said that the overall space industry could reach $1 trillion in revenue by 2040, as lower launch costs unlock new use cases and opportunities. A lot of space applications also rely on launch services. The demand from the commercial side is also growing, as the number of satellite launches from customers such as Planet Labs ( PL) continues to rise. The market expansion is driven by the ongoing increases in the government’s budget for space, most notably NASA. While Fortune Business Insights estimates the market will grow at a CAGR (compounded annual growth rate) of 12.3% and reach $31.9 billion in 2029. ![]() According to the company, the TAM (total addressable market) of launch services is estimated to be $20 billion while the TAM of Space Systems is estimated to be $44 billion. Rocket Lab's market opportunities are huge. Its current clients include NASA, the US government, and commercial companies such as BlackSky Technology ( BKSY) and Globalstar ( GSAT). The company provides launch services through its Electron rocket and other space services such as satellite design and spacecraft manufacturing. Rocket Lab is a US-based space company founded in 2006 by Peter Beck. I like the risk-to-reward at the current price level therefore I rate RKLB stock as a buy. Even though it is still burning cash, it has ample liquidity and should not have to raise capital anytime soon. If everything goes according to plan, it will be a major growth driver that generates a significant amount of revenue. The real opportunity lies within Neutron, a much larger rocket that is aiming to make its debut in 2024. Rocket Lab is already seeing great success with its Electron rocket and Space System segment but this is just the start. I believe the drop offers a great buying opportunity for “risk-tolerant” investors as the company is pursuing a massive market. However, the company has dropped over 60% since going public in 2021 as the market sentiment hasn't been favouring growth stocks. Rocket Lab ( NASDAQ: RKLB) is one of the most interesting and exciting SPAC companies that went public. NicoElNino/iStock via Getty Images Investment Thesis ![]()
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