Rocket Lab Enters Local Bear Market Ahead of SpaceX IPO

Rocket Lab Inc. shares slipped into a local bear market after a 25% decline from this year’s high, trading at $113.65 and reducing the company’s market capitalization to about $65 billion during recent trading on the NASDAQ.

The pullback followed a rapid run-up earlier this year, when the stock rose from a low of $4.26 to a peak near $150. That rally lifted Rocket Lab’s market value from under $1 billion to tens of billions of dollars before the recent decline narrowed the gap from the high.

Declines in Rocket Lab shares came as other public space companies also fell. Planet Labs traded down from a year-to-date high near $51.70 to about $32. Virgin Galactic shares fell roughly 54%, from $8.90 to $4.12. Space-focused exchange-traded funds also retreated, with the Procure Space ETF moving from $68.30 to $54.85 and the Tema Space Innovators ETF falling from $42.65 to $33.30.

Market participants had pushed valuations higher in recent months ahead of the planned SpaceX initial public offering. SpaceX is expected to seek more than $75 billion in the flotation, an offering that investors have watched closely and that coincided with earlier strength in space-sector stocks.

Rocket Lab provides launch services, spacecraft design and manufacturing, and optical systems for commercial and government customers. Its current small launcher, Electron, carries payloads of about 300 kilograms. The company is developing a larger vehicle, Neutron, with an expected payload capacity near 8,000 kilograms.

Company results for the most recent quarter showed revenue of $200.3 million, up 63.5% from $122.0 million a year earlier. Rocket Lab conducted six launches during the quarter and reported a backlog of more than 70 launches. Sequential quarterly revenue rose about 11.5% from the prior quarter. Analyst estimates compiled by market trackers project quarterly revenue near $231 million and forecast annual revenue of roughly $914 million for the current year, rising to about $1.29 billion the following year.

On technical charts, the stock’s pullback left it trading above the 50-day exponential moving average and just above a support level near $100, a recent intra-year high. The relative strength index declined below the neutral 50 level.

The recent correction reduced the paper gains accumulated during the earlier rally, which had increased the share price and market capitalization sharply over a short period.