Rocket Lab Shares Surge Despite Multi-Million-Dollar Losses

Rocket Lab, the New Zealand-founded space company, has seen its share price soar by over 800% in the past year, despite reporting multi-million-dollar losses. Shares are now trading at nearly US$50 each, a stark contrast to less than US$5 in August of last year. The company’s 2024 financial year saw a loss of between US$33 million and US$35 million, even as it achieved record annual revenue of US$436.2 million.

Investors are increasingly looking past the company’s lack of profitability and focusing on its momentum and future potential. Greg Smith, head of retail at Devon Funds, noted that Rocket Lab is gaining credibility through strategic partnerships, including a recent agreement with the European Space Agency for satellite launches before December. The company has also achieved a string of successful rocket launches, with one Electron rocket being produced every 15 days. The upcoming Neutron rocket, a medium-lift vehicle, could unlock over US$5.6 billion in potential National Security Space Launch contracts.

Gretjan Verdickt, a finance lecturer at the University of Auckland, explained that Rocket Lab's current valuation is based on the promise of a future space economy that is