Should You Buy, Hold or Sell Rocket Lab Stock Ahead of Q3 Earnings?

Rocket Lab USA, Inc. RKLB is slated to report third-quarter 2025 results on Nov. 10, 2025, after market close.

The Zacks Consensus Estimate for revenues is pegged at $149.8 million, indicating an improvement of 42.9% from the year-ago quarter’s reported figure. The consensus mark for the bottom line is pegged at a loss of five cents per share, implying an improvement from the prior-year quarter’s reported loss of ten cents.

RKLB’s earnings beat the Zacks Consensus Estimate in one of the trailing four quarters and missed in three, the average negative surprise being 16.22%.

Earnings Whispers

Our proven model predicts an earnings beat for RKLB this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat, which is the case here. You can uncover the best stocks before they are reported with our Earnings ESP Filter.

Rocket Lab has an Earnings ESP of +25.00% and a Zacks Rank of 3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Key Factors to Consider

Higher revenues generated from growth in the number of launch missions, as well as solid revenue contributions from strong bookings witnessed in the prior quarters, are likely to have bolstered the top line of the Launch Services business segment.

Solid growth in spacecraft and satellite manufacturing is likely to have boosted revenue growth for its Space Systems business segment.

What is Likely to Have Impacted RKLB’s Bottom Line?

Solid revenue contribution from both of its segments is likely to have bolstered Rocket Lab’s overall revenues in the third quarter.

Such a strong revenue projection is also expected to have boosted RKLB’s third-quarter earnings growth. However, increased operating costs due to higher spending on the Neutron program, a growing workforce, rising research and development expenses and greater IT-related costs, including enhanced cybersecurity requirements for RKLB’s U.S. Government programs, are likely to have weighed on its operating margin. This, in turn, is anticipated to have negatively affected its overall earnings.

Price Performance & Valuation

RKLB’s shares have exhibited an upward trend, gaining a notable percentage over the past year. Specifically, the stock soared 332.3% in the time frame, outperforming the Zacks aerospace-defense equipment industry’s growth of 26.3%. It has also outpaced the broader Zacks Aerospace sector’s return of 24% as well as the S&P 500’s gain of 17%.

A similar stellar performance has been delivered by other industry players, such as Kratos Defense & Security Solutions, Inc. KTOS and CurtissWright Corporation CW, whose shares have surged 215.6% and 56.6%, respectively, over the past year.

In terms of valuation, RKLB’s forward 12-month price-to-sales (P/S) is 33.39X, a premium to its industry’s average of 9.47X. This suggests that investors will be paying a higher price than the company's expected sales growth compared with its industry’s P/S ratio.

However, its industry peers are currently trading at a discount compared with RKLB. While the forward 12-month price/earnings multiple for KTOS is 9.97, the same for CW is 6.11.

Investment Thesis

According to an April 2024 report by the World Economic Forum, the global space economy is projected to reach $1.8 trillion by 2035, fueled by the rising adoption of satellite-based and rocket-enabled technologies. This promising outlook supports the long-term growth potential of space-focused companies like RKLB.

However, RKLB continues to face certain challenges that investors should consider before taking a position in the stock. A major concern is its elevated operating expenses, largely stemming from ongoing investments in new product development and technological enhancements. These high costs often offset the benefits of robust revenue growth, resulting in recurring quarterly losses.

Should You Buy RKLB Before Nov. 10?

RKLB is less likely to disappoint with its third-quarter 2025 results, taking into account its favorable Zacks Rank, solid revenue growth expectations and positive Earnings ESP. However, considering its premium valuation compared with its industry, investors interested in RKLB should remain on the sidelines before this earnings release.

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This article originally published on Zacks Investment Research (zacks.com).

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