Rocket Lab Reports Next Week: Here's What Investors Should Know

Rocket Lab USA, Inc. (NASDAQ: RKLB), a leading aerospace name, is set to report earnings for the second quarter of fiscal 2025 on August 7, and institutional and retail investors are watching closely. The stock has gained significant online attention and a following for good reason. The company has continued to execute at a high level. 

The result? The stock has rocketed higher over the previous year. Shares are up 760% over the last twelve months and 82% on the year. 

After surging to new all-time highs earlier in the month, the stock has since pulled back 13% from its highs but remains in a firm uptrend. Investors will be eagerly anticipating the upcoming earnings as they might impact the stock's short-term trajectory, given the significant upward momentum. Here’s what investors should know ahead of its forthcoming report.

Technical Setup: Despite Recent Pullback, Uptrend Remains Intact

Ahead of earnings, the stock has maintained its bullish positioning across multiple timeframes. Despite its recent pullback from its 52-week highs, shares remain firmly above significant SMAs. In the short term, the stock just found support at its 20-day SMA near $43. That level will act as major short-term key support going forward. 

On a higher timeframe, its 50-day near $35 will act as a significant potential inflection point post-earnings. Should the stock fall below that area, it would signal a major shift in momentum and one sparked by a substantial miss on earnings, margins, or potential Neutron commentary. 

So, on that note, let’s take a closer look at its previous earnings and what to watch for in its upcoming earnings.

Q1 Recap: Solid Growth, Improving Margins

In Q1 2025, Rocket Lab reported revenue of $122.6 million, slightly below the analyst estimate of $123 million but reflecting a 32.1% year-over-year increase from Q1 2024. Launch services contributed $35.6 million, driven by Electron missions, while space systems generated $87 million, led by contributions from satellite manufacturing and components businesses.

The company achieved a non-GAAP gross margin of 33.4%, improved sequentially due to a favorable mix in satellite manufacturing, though slightly offset by a lower average selling price in launch services.

The adjusted EBITDA loss was $30 million, better than the guidance range of $33 million to $35 million, indicating operational improvements despite ongoing investments in the Neutron program.

Rocket Lab's backlog at the end of Q1 2025 was $1.067 billion, with $422.2 million in launch backlog and $644.8 million in space systems backlog, reflecting strong future demand. Approximately 50% of this backlog is expected to convert to revenue within 12 months.

Key Metrics to Watch in Q2

Heading into earnings, there are three main areas investors will potentially focus on:

1. Launch Cadence and Pipeline Clarity

Rocket Lab completed multiple successful Electron launches in Q2 and has a full slate of missions lined up. Investors will want clarity on the Neutron rocket timeline, as this vehicle is central to RKLB’s long-term revenue expansion and access to larger contracts.

2. Backlog Growth and Contract Wins

In Q1, the backlog remained strong, bolstered by defense and civil space contracts. Any update showing increased backlog or new awards from agencies like NASA could strengthen the bull case.

3. Margins and Cash Burn

Progress on margins will be critical. Investors are looking for continued gross margin expansion and signs that Rocket Lab is on a path toward positive EBITDA. The company has managed costs well so far, but scaling the launch and space systems businesses efficiently will remain a priority.

Analyst Sentiment and Valuation

RKLB maintains a consensus Moderate Buy rating and an average price target of $35.64. Several analysts have recently taken positive action ahead of earnings.

Notably, Citigroup upgraded its target from $33 to $50, and Bank of America analysts boosted their target from $30 to $50.

However, there’s no denying that the stock trades at a premium valuation on a price-to-sales basis.

But with revenue growing rapidly and high visibility from backlog, some believe it’s justified.

Still, expectations are elevated. RKLB needs to show continued execution to maintain investor confidence and potentially attract further institutional buyers as the business matures and Nuetron becomes a reality.

Nearing a Critical Inflection Point

Rocket Lab is nearing a technical inflection point just as a potential fundamental catalyst approaches. With Q2 earnings due August 7, investors will be watching closely for updates on launch cadence and Neutron, backlog strength, and margin progress.

If RKLB delivers a strong print and maintains its upward trend, it could trigger further momentum after an already impressive YTD performance. Either way, the upcoming earnings will likely determine and set the tone for the next phase of Rocket Lab’s trajectory.

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The article "Rocket Lab Reports Next Week: Here’s What Investors Should Know" first appeared on MarketBeat.