Launch and space systems company Rocket Lab (NASDAQ:RKLB) is emblematic of the volatile nature of space exploration stocks. RKLB stock began trading on the Nasdaq on Aug. 25, after the company completed a reverse merger with special purpose acquisition company (SPAC) Vector Acquisition.
Admittedly, shares were slow to launch. They stayed close to the typical pre-deal SPAC stock price of $10 until early September. Following the release of Rocket Lab’s first earnings report as a publicly traded company, RKLB stock shot up 110% in just over a week, hitting a high of $21.34 on Sept. 9.
But just as fast as shares rocketed higher, they came crashing down to Earth again, teaching stock chasers a hard lesson. RKLB stock fell roughly 35% over two weeks, dipping below $14 a share.
As I write, the stock sits around $12.35. Thankfully, some recent developments suggest the company is headed in the right direction, even if the share price isn’t yet.
Rocket Lab Out to Launch
While Rocket Lab is not estimated to turn a profit for at least a few years, the company is growing sales at an impressive clip. Furthermore, it is delivering on its mission to rapidly advance the science of space travel.
Rocket Lab is the leading maker of small launch vehicles. So far in 2021, the company has completed four missions of its Electron reusable orbital-class small rocket, bringing its total launches to date to 21. The Electron has also deployed 105 satellites into orbit.
Rocket Lab is planning two additional Electron launches next month to deploy satellites for geospatial and global monitoring company BlackSky Technology (NYSE:BKSY).
Commenting on the multi-launch deal with BlackSky, Rocket Lab CEO Peter Beck stated: “The speed to space Electron provides our customers is unmatched in the dedicated small launch industry, and we’re thrilled to be delivering a launch service that provides assurance for BlackSky to scale their constellation and services with confidence.”
While the company continues to launch the Electron, it is also working on developing its medium-lift Neutron launch vehicle. This next-gen rocket, which will be able to deliver a payload of nearly 9 tons to low-Earth orbit, is expected to begin launching in 2024.
End-to-End Space Solutions
Rocket Lab’s space missions will continue to be the headline grabbers, but there’s another positive development that occurred without much fanfare.
Last week, Rocket Lab finalized its acquisition of space software business Advanced Solutions in a deal valued at $40 million. Advanced Solutions’ flight software is focused on mission simulation, component testing and navigation.
I see the deal as a win-win for the two companies. Rocket Lab seeks to be a broad-based space services company, and Beck said the acquisition will “enhance our space systems portfolio and deliver enhanced end-to-end space solutions.”
Meanwhile, Advanced Solutions founder and CEO John Cuseo said the two companies “complement each other very well” and will now have “more rocket fuel in the tank to play with” as they continue serving customers and innovating.
The Bottom Line on RKLB Stock
RKLB stock has experienced some major turbulence in the past few months. And that’s not likely to change any time soon. But we’re talking about a SPAC merger, space exploration and a pre-profit company. Anyone expecting a smooth ride is barking up the wrong tree. That being said, the company holds a lot of promise.
In the short term, RKLB stock could get a boost from upcoming launches. And investors who buy at today’s beaten-down price and hold for the long haul could see their patience handsomely rewarded. Just be prepared for the roller-coaster ride to continue.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
David Moadel has provided compelling content – and crossed the occasional line – on behalf of Crush the Street, Market Realist, TalkMarkets, Finom Group, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.