Why Rocket Lab Stock Is Soaring This Week

Shares of launch services and space systems innovator Rocket Lab (NASDAQ: RKLB) rose 19% this week as of noon ET on Thursday, according to data provided by S&P Global Market Intelligence.

The catalyst for Rocket Lab's share price hitting all-time highs came from an announcement where it signed a three-launch deal with Japan's Institute for Q-shu Pioneers of Space (iQPS).

This development adds to a four-launch deal already booked with iQPS, which is building out its Earth-imaging constellation via Rocket Lab's Electron rockets.

This arrangement comes just one week after Rocket Lab secured a 10-launch agreement with Japan's Synspective, which will now have 21 launch missions together.

Rocket Lab: Firing on all boosters

Already home to a $1 billion backlog as of the second quarter, founder-led Rocket Lab keeps stacking launch orders as quickly as it can get rockets in the sky.

These deals provide steady growth, but Rocket Lab's burgeoning capabilities are the star of the show for investors looking decades down the road.

Image source: Getty Images.

These capabilities include:

• A Q2 announcement of back-to-back launches on Complex 1 in two days, showing the potential for higher launch frequency
• The company's Geost acquisition closing, building out Rocket Lab's payload opportunities
• Approaching clearance for a buyout of Mynaric and its laser communication abilities, adding to Rocket Lab's vertical integration
• A potential launch of its new Neutron rocket later this year, which would open the door for larger payloads
• A margin profile that is quickly improving, reducing the stock's reliance on outside funding

So is Rocket Lab a buy?

Despite all these promising traits, however, Rocket Labs trades at a lofty 67 times sales and is not yet profitable. Interested investors may want to buy shares in multiple batches over time, rather than all at once.

Josh Kohn-Lindquist has positions in Rocket Lab. The Motley Fool has positions in and recommends Rocket Lab. The Motley Fool has a disclosure policy.