Rocket Lab Expands Into Payloads: Should You Be Paying Attention?

Rocket Lab USA, Inc. (NASDAQ: RKLB) has taken another significant step in its evolution from a launch provider to a vertically integrated space and defense company. The company recently announced a definitive agreement to acquire Geost, a developer of electro-optical and infrared (EO/IR) payloads for national security satellites. 

With this acquisition, Rocket Lab officially enters the payload segment, broadening its capabilities, improving its margins, and positioning itself as a full-service provider in the growing national security space race.

Following the announcement, RKLB received several bullish analyst upgrades. Firms highlighted the deal's strategic value and its long-term implications for the company’s position in the defense and aerospace sectors.

Rocket Lab to Acquire Geost for $275 Million

Last week, Rocket Lab unveiled plans to acquire Geost in a deal valued at up to $275 million, including $125 million in cash and $150 million in Rocket Lab stock, along with a potential $50 million earnout. The deal is expected to close in the second half of this year. It includes Geost’s intellectual property, manufacturing infrastructure in Arizona and Virginia, and its team of 115 highly skilled engineers and technical staff.

Geost brings over two decades of experience developing EO/IR payloads used in missile tracking, tactical intelligence, surveillance, reconnaissance (ISR), and space domain awareness. These are all key priorities for the U.S. Department of Defense and are aligned with initiatives such as the Space Development Agency’s Tracking Layer and Golden Dome programs.

The move expands Rocket Lab’s value proposition beyond launch and satellite buses into the high-value payload space, reducing integration risks and increasing control over mission cost and timelines, which is particularly important for defense customers.

Rocket Lab CEO Peter Beck said of the acquisition: “With the acquisition of Geost, we’re bringing advanced electro-optical and infrared payloads in-house to support secure, responsive, and cost-effective systems at scale.”

Analysts See Upside Following Announcement

The market took notice. On May 28, several analysts raised their price targets for Rocket Lab. Roth Capital raised its target price from $25 to $35, while maintaining a Buy rating. Stifel Nicolaus analyst Erik Rasmussen also increased his target price from $29 to $34, citing the strategic importance of the Geost acquisition and its potential to expand Rocket Lab’s addressable market significantly.

Analysts at Stifel emphasized that the acquisition strengthens Rocket Lab’s foothold in defense and aerospace and supports its long-term growth strategy by unlocking new revenue streams. Needham & Company also weighed in positively, increasing its target from $28 to $32 and maintaining its Buy rating.

In total, RKLB now has 14 analyst ratings, with a consensus rating of Moderate Buy. That said, the average price target currently sits at $25.18, implying a modest downside from current levels.

This reflects both the stock’s sharp run-up over the previous year, with gains exceeding 500%, and some skepticism surrounding its lofty valuation and lack of profitability, which have yet to align with the company’s long-term vision.

Technical Momentum and Market Positioning

Despite mixed earnings, momentum is clearly on Rocket Lab’s side. The stock has increased by over 536% in the past year and 42% so far this quarter, garnering significant attention from retail investors. Even during the recent broader market corrections, RKLB held up well and is now trading just beneath key resistance around the $30 level.

From a technical standpoint, the $25 level is shaping up as a potential new support zone. Investors looking to enter or add to positions may want to wait for some sideways consolidation or a retest of this level to confirm a higher low before chasing a breakout. Thereafter, a clean move above $30 could pave the way for new highs.

A Transformative Step in the Company’s Mission

Rocket Lab’s planned acquisition of Geost is more than just another deal; it’s a transformative step in the company’s mission to become a vertically integrated defense and space contractor. With analysts bullish on the move and momentum on its side, RKLB remains a name to watch, especially if it continues to execute and expand its presence in the national security space.

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