RKLB Outperforms Industry in the Past Year: How to Play the Stock?

Rocket Lab USA, Inc. RKLB stock has surged 168.7% in the past year, surpassing the 31.8% growth of the Zacks Aerospace-Defense Equipment industry. It has also outperformed the Zacks Aerospace sector’s growth of 30% and the S&P 500’s rise of 16.8%.

Other defense equipment stocks, such as Kratos Defense & Security Solutions KTOS and AeroVironment AVAV, have also outpaced the industry in the past year. Shares of KTOS have gained 208.2%, while shares of AVAV have rallied 53%.

With RKLB’s recent rise in the market, some investors may be tempted to jump in quickly. However, it’s important to look closely at what’s driving this strong performance before making a decision. The main question is whether the company can sustain this momentum or if potential risks could slow its growth going forward. Taking a closer look can help investors reach a more balanced and well-informed conclusion.

Tailwinds for RKLB

RKLB’s recent momentum is supported by continued operational progress and key program developments, which have helped maintain investor confidence.

In January 2026, Rocket Lab successfully completed its 81st Electron launch, marking its second mission in just eight days. The launch deployed a satellite for an Earth-observation constellation operated by the Korea Advanced Institute of Science and Technology. This achievement highlights Rocket Lab’s ability to execute frequent and reliable launches for international customers, strengthening its position in the small-satellite launch market.

In the same month, Rocket Lab also reached an important milestone for its Neutron rocket program with the delivery of its “Hungry Hippo” captive fairing to Virginia. After completing qualification testing late last year, the fairing was transported to the Neutron Assembly and Integration Complex at Wallops Island and is now being prepared for further pre-launch testing. This progress reflects Rocket Lab’s steady advancement toward expanding its launch capabilities and supporting long-term growth opportunities.

Risks to Consider Before Choosing RKLB

Rocket Lab has strong near-term growth potential, but investors should also consider some risks. One major concern is the company’s high operating costs, which increased 45.6% in the first nine months of 2025 compared with the same period in 2024.

The company continues to spend heavily on developing advanced technologies such as the Neutron rocket, satellite platforms and other space systems. While these investments support future growth, expenses have been rising faster than revenues, resulting in continued losses in recent quarters and possibly in the near term as well.

RKLB: A Glance at Near-Term Estimates

The Zacks Consensus Estimate for RKLB’s 2026 revenues indicates a solid improvement of 43.9% from the prior-year level. The estimate for its earnings also calls for a solid increase from the prior-year quarter.

The upward revision in its 2026 earnings estimate over the past 60 days reflects increasing analysts' confidence in its earnings growth prospects.

RKLB Shares Are Trading at a Premium

RKLB shares are trading at a premium, with its forward 12-month Price/Sales (P/S F12M) being 44.79X compared with its industry’s average of 12.32X.

Its industry peers, Kratos and AeroVironment, are trading at a discount in comparison with RKLB. KTOS is trading at a P/S F12M of 10.19X, while AVAV is trading at a P/S F12M of 6.03X.

Liquidity Position of RKLB

RKLB has a current ratio of 3.18. The ratio, being more than one, indicates that RKLB possesses sufficient capital to pay off its short-term debt obligations.

Its industry peers, Kratos and AeroVironment, also maintain current ratios above one. Kratos has a current ratio of 4.30, while AeroVironment holds 5.08.

Conclusion

Investors interested in RKLB should wait for a better entry point, considering its premium valuation and persistent high operating costs. However, those who already own this Zacks Rank #3 (Hold) stock may choose to maintain their positions, taking into account its solid long-term prospects, strong liquidity, performance at the bourses and strong sales growth expectations. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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

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