If you’re looking for a millionaire-maker stock, one way to do it is finding a small company pioneering a massive long-term opportunity. Rocket Lab USA (NASDAQ: RKLB) certainly seems to fit the bill as it aims to capture a slice of the rapidly expanding space satellite and rocketry industries. Below, I’ll look at the company’s pros and cons to decide if it can help make you rich.
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According to McKinsey & Co., the global space economy could be worth $1.8 trillion by 2035 (up from $630 billion in 2023), driven by demand for satellites, launches, navigational services and more.
The industry is currently dominated by a few large companies, like SpaceX, with a 45% share of global satellite launches, as of 2023. However, SpaceX is a private company, and its shares aren’t available to retail investors, making smaller players like Rocket Lab USA the only way for the general public to bet on this opportunity.
SpaceX and Rocket Lab have similar business models, primarily focusing on sending cargo and satellites to space. But while SpaceX is known for larger, more sophisticated missions, Rocket Lab’s niche trends toward smaller, more specialized payloads.
Rocket Lab’s key product, the Electron launch vehicle, is a rocket designed to take small satellites into orbital space where they can provide services to clients on Earth. Like SpaceX, the company has focused on making its rockets reusable, which can reduce costs and help the business model scale. That said, the Electron is only designed to carry payloads of up to 300 kilograms, which is significantly lower than SpaceX’s Falcon Heavy, which can transport a whopping 64 metric tons into space.
Over the long term, RocketLab will likely need to develop larger launch vehicles to unlock economies of scale and boost margins. But for now, its business is enjoying healthy operational momentum.
In the fiscal third quarter, revenue jumped 55% year over year to $105 million, while operating losses expanded…
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