Rocket Lab stock rose to the important resistance level of $80 after the company reported strong financial results. RKLB has jumped by 37% from its lowest point this year, and analysts believe that it has more upside to go as it solidifies its role in the space industry.
Rocket Lab published strong earnings
RKLB stock has jumped in the past few days, and this uptrend may continue in the coming months as its growth continues. Its results were better than expected, with its revenue rising by 62% YoY to $234 million and its backlog surging by 137% to $2.36 billion.
The company also received an additional $800 million in contracts after the quarter ended. For example, it inked a Neutron deal with Kepler Communications this week. And last week, it was awarded a $397 million contract to build and launch flatellites for the US Space Force.
It also received a major order worth $266 million from the US Space Force for its suborbital launches. This growth will likely continue as demand for satellite deployments gains steam. Also, the company has expanded to Germany, where it aims to take advantage of the growing European market.
Rocket Lab continued narrowing its losses, with its net loss coming in at $49 million in the second quarter from $66 million in the same period last year.
The company also boosted its forward guidance. It now expects that its revenue will be between $250 million and $265 million. The upper side of the range is higher than the $253 million that analysts were expecting. Indeed, the most optimistic analyst expected the revenue to hit $260 million in Q3.
Other metrics are expected to improve. For example, the GAAP gross margin is expected to improve to between 29% and 31%, while its operating expenses are expected to be between $143 million and $149 million.
Analysts have boosted their RKLB stock forecasts
These strong earnings and its recent acquisitions have boosted their forecasts. Andres Sheppard, a top analyst from Cantor Fitzgerald, hiked the target from $96 to $122. Trevor Walsh of Citizens Bank maintained the market outperform target of $130, while Needham and KeyCorp reiterated their buy and overweight ratings.
The consensus target among analysts is $110, representing a nearly 40% upside from the current level. A year ago, the consensus target was at $42, a sign that its business is improving.
In addition to the ongoing demand, analysts are citing the company’s recent acquisitions, including the $8 billion Iridium buyout. It also acquired Mynaric and Motiv to continue its vertically integrated business.
Rocket Lab stock price technical analysis
RKLB stock chart | Source: TradingView
The daily chart shows that the RKLB stock retreated from the year-to-date high of $151.04 on May 27 to a low of $58.58 earlier this month. It then bounced back to $86 and then pulled back to the current $77.
The stock is hovering at the strong, pivot, reverse level of the Murrey Math Lines tool and the 200-day Exponential Moving Average (EMA). Most notably, it has formed a shooting star candlestick pattern, which normally leads to a steep reversal.
Therefore, there is a risk that the stock will resume the downward trend, potentially to the ultimate support of $50. The bearish outlook will become invalid if it moves above the upper side of the shooting star candle of $87.
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