Rocket Lab's stock dropped 40% due to delays

Rocket Lab USA's stock has dropped 40% in recent weeks after a remarkable rise last year. The stock price soared from around $4 in spring 2024 to over $30 by January 2025. Investors were initially excited about Rocket Lab's progress as it positioned itself as a competitor to SpaceX. But concerns have resurfaced about the delay of its new Neutron rocket, which some analysts believe won't be ready as planned in 2025. Rocket Lab has established itself as a reliable launch service, focusing on small payloads with its Electron rocket. Last year, the Electron launched 16 times with a perfect success rate. The company is also growing its Space Systems division, which generated $311 million in revenue in 2024, up from $172.7 million in 2023. Overall, Rocket Lab reported $436 million in revenue last year, a significant increase from previous years. The anticipated debut of the Neutron rocket is expected to offer larger payload capabilities and increase revenue per launch. However, concerns have arisen that the project may face delays due to the complex development and necessary infrastructure. Analysts warn that delays could lead to increased costs and the need for additional funding, which may further decrease the stock price. Despite Rocket Lab’s growth and strong past performance, uncertainties related to the Neutron rocket project raise concerns. The stock’s current market value suggests Neutron's success is guaranteed, but such confidence could be misplaced. The company is losing close to $200 million annually and generates less than $500 million in revenue. Given these risks, analysts suggest that Rocket Lab stock may not be a good buy at the moment. It might be wise for investors to keep an eye on the stock but refrain from making a purchase until more clarity on the Neutron rocket emerges.