Rocket Lab Corporation (RKLB): A Bull Case Theory

We came across a bullish thesis on Rocket Lab Corporation  on Stay Invested’s Substack by Denis Gorbunov. In this article, we will summarize the bulls’ thesis on RKLB. Rocket Lab Corporation 's share was trading at $44.75 as of August 5^th

Rocket Lab (RKLB) is an emerging player in the space industry, providing small satellite launch services, spacecraft platforms, and mission support for commercial, scientific, and defense clients. Its Electron rocket, capable of delivering up to 300 kg to low Earth orbit, is the second most frequently launched U.S. commercial rocket after SpaceX. The company is also developing the medium-lift Neutron rocket, designed for deep-space missions, with initial launches expected in 2025-26.

Beyond launch services, Rocket Lab offers the Photon spacecraft for orbit-ready satellite delivery, manufacturing the entire platform in-house, and operates mission management facilities and launch complexes in the U.S. and New Zealand. With growing participation in national security space programs and a surge in small satellite demand, Rocket Lab is positioned as a key contender in the commercial space race, securing contracts from NASA, DARPA, and the U.S. Space Force.

Financially, the company reported a 65% revenue increase over the last four quarters, underscoring strong top-line momentum. However, persistent negative earnings and free cash flow remain concerns, with a recent quarterly loss of $60.6 million, long-term debt of $404 million, and free cash flow of -$177 million. These figures highlight ongoing cash burn as Rocket Lab scales operations and executes on a heavy launch schedule.

While RKLB has strong growth prospects and a diversified revenue base, the stock remains speculative until profitability improves. A sustained trend toward positive earnings over the coming quarters could present an attractive entry point, but near-term volatility and execution risk remain key considerations for investors.

Previously we covered a bullish thesis on Rocket Lab Corporation (RKLB) by Steve Wagner in May 2025, which highlighted revenue growth, defense contracts, and the upcoming Neutron rocket as key drivers. The company’s stock price has appreciated approximately by 67% since our coverage. This is because the thesis played out with strong backlog and successful launches. The thesis still stands as RKLB’s defense positioning remains intact. Denis Gorbunov shares a similar view but emphasizes financial challenges tied to profitability.

Rocket Lab Corporation  is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 31 hedge fund portfolios held RKLB at the end of the first quarter which was 37 in the previous quarter. While we acknowledge the potential of RKLB as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.