Here's a classic market puzzle: a company reports quarterly revenue that beats expectations, shows earnings that also top estimates, and announces its backlog of future business has roughly doubled. The stock's reaction? It tanks, falling over 10%. Welcome to the curious case of Rocket Lab Corp. (RKLB) this week.
The space company's shares extended their post-earnings decline into Friday, even after delivering what looked like a strong report. The twist? Two Wall Street analysts looked at the same set of facts—the revenue beat, the growing backlog—and came to sharply different conclusions about where the stock is headed next. It's a neat illustration of how markets process information, where future risks can sometimes matter more than present successes.
On one side, you have Citizens JMP Securities. On the other, Cantor Fitzgerald. Both noted the company's fourth-quarter revenue of $179.7 million, which was up 36% year-over-year and ahead of the $177.2 million consensus. Both saw the adjusted EBITDA loss of $17.4 million, which also beat expectations. And both, undoubtedly, saw the backlog number: roughly $1.85 billion, nearly double what it was the prior quarter, with about 37% of that expected to be recognized within the next 12 months. That's the "doubled its business" part. So why the stock drop? It seems the "why" is where the analysts parted ways.
The Bear Case: Execution Risk and a Lofty Price Tag
Citizens JMP analyst Trevor Walsh maintained a Market Perform rating. His concern wasn't with the past quarter's numbers, but with what comes next. He flagged the delay of the Neutron rocket's first launch to the fourth quarter of fiscal 2026, a push from the first quarter. The cause was a third-party manufacturing defect that led to a Stage 1 tank rupture. While management said the financial impact would be negligible, Walsh saw it as a potential drag on investor sentiment.
He also looked at the price. The stock, he noted, is trading at 30.1 times the calendar 2027 estimated enterprise value-to-revenue. That's a 343% premium to the aerospace and defense peer group. For Walsh, that elevated valuation, combined with Rocket Lab's reliance on government contracts and the execution risk now associated with the Neutron program, could limit how much higher the stock's multiple can go in the near term. He lowered his fiscal 2026 non-GAAP earnings per share estimate to a loss of 8 cents from a loss of 6 cents, and cut his fiscal 2027 estimate to 9 cents from 11 cents.
The Bull Case: Scale, Contracts, and a Brighter Future
Then there's Cantor Fitzgerald's Andres Sheppard, who looked at the same data and saw a very different picture. He reiterated an Overweight rating and, notably, raised his price target—to $85 from $72. His focus was on the scale and momentum. He pointed to the record fiscal 2025 revenue guidance of $601.8 million, 21 successful launches last year, and that massive, doubled backlog.
Regarding the Neutron delay to late 2026, Sheppard acknowledged it but does not expect a material impact on the company's long-term trajectory, especially as the company plans to "completely replace the manufacturing process that introduced the defect." His optimism is reflected in his numbers: he raised his fiscal 2026 and 2027 revenue estimates to $871.4 million and $1.29 billion, respectively. He values the stock using a 10-year discounted cash flow model, citing improved scale, higher average selling prices, and that backlog growth as support for his much higher price forecast.
So, you have two professional analysts. One sees risk and a rich valuation that limits upside. The other sees a growth trajectory that justifies a stock price nearly 30% above its current level. The market, at least on Friday, seemed to be leaning into the first narrative. Rocket Lab shares were down 9.55% at $65.70 at the time of publication. Sometimes, even when you double your business, all the market wants to talk about is what got delayed.
