Rocket Lab falls 50% from peak as Piper Sandler flags valuation risk

Key Takeaways:

Rocket Lab stock fell more than 50% from its May peak of $151 to the mid-$60s
Piper Sandler initiated coverage at Neutral with an $83 price target
The company trades at roughly 66 times trailing sales despite a $198 million net loss

Piper Sandler initiated coverage of Rocket Lab USA Inc. at Neutral with an $83 price target, arguing the stock remains expensive even after falling more than 50% from its 52-week high of $151 in May.

"The stock remains fairly expensive relative to the complex profile of vertically integrated space companies," the firm said in a July 15 note, sending shares down more than 11% in a single session. The call came as Rocket Lab's stock collapsed toward the mid-$60s, wiping out the entire year's gains.

Rocket Lab trades at roughly 66 times trailing sales despite generating $601.8 million in trailing revenue for fiscal 2025 and posting a net loss of $198 million, with net margins of negative 27%. The company's first-quarter revenue climbed 63% from a year earlier to a record $200.35 million, and its contracted backlog reached a record $2.2 billion. Rocket Lab also secured a $266 million US Air Force contract this week and was named one of seven companies eligible for a Space Force launch program carrying a $17 billion ceiling. The pending $8 billion acquisition of Iridium would add recurring services revenue but has introduced dilution concerns.

The broader analyst community remains more constructive than Piper Sandler. The consensus rating across 22 analysts is Moderate Buy, with an average price target of $110.18 that implies close to 60% upside. The Street-low target of $60 sits modestly below where the stock trades today. Attention now turns to second-quarter earnings on Aug. 6, plus any fresh detail on the Neutron rocket debut and the Iridium deal timeline. The decline puts the stock at its lowest since the start of 2026, testing whether the correction was an overdue reset or the opening of a more durable entry point for long-term investors.

This article is for informational purposes only and does not constitute investment advice.