Rocket Lab Stock Falls 31% as Technical Pullback Emerges

Rocket Lab shares fell to $104 on Tuesday, down 31% from the stock’s year-to-date high, reducing market value by about $27 billion from roughly $87 billion to $60 billion. Price action formed a rising broadening wedge, a pattern some traders view as a bullish continuation signal, while other indicators point to waning short-term momentum.

The pullback followed a rapid rally in space-related stocks earlier this year. Investors trimmed positions after the SpaceX initial public offering, a dynamic some traders describe as buying the rumor and selling the news. Other space names have also retreated from earlier highs: Planet Labs is off about 45%, and Intuitive Machines, Redwire and Virgin Galactic have each declined more than 50%. The Procure Space ETF rose from near $15 in April to about $68.30 at its peak before pulling back.

Rocket Lab reported first-quarter revenue of $200.3 million, a 63% increase from the prior year, and a gross margin of 38.2%. The company added 31 new contracts for its Electron and HASTE vehicles during the quarter. Electron has completed 261 launches, and the company reports more than 1,700 satellites in orbit connected to its services.

Analyst estimates and company projections point to continued revenue growth. Average Street estimates call for second-quarter revenue near $231 million, roughly 60% higher year over year. Consensus forecasts put full-year revenue at about $914 million for the current year and $1.29 billion next year. Company materials and some analyst models estimate revenue could approach $5 billion by 2030 if Neutron captures expected demand in larger-payload and frequent-launch markets.

Neutron is designed as a larger, reusable vehicle with a payload capacity of about 13,000 kilograms. By comparison, Electron can carry roughly 300 kilograms to sun-synchronous orbit and about 320 kilograms to low Earth orbit. The company and market participants say Neutron would expand Rocket Lab’s addressable market beyond small-satellite launches.

Share count and valuation are cited as risks. Rocket Lab’s shares outstanding increased from about 460 million earlier last year to roughly 575 million after a $2 billion capital raise. The stock’s forward price-to-sales ratio is near 70. KeyCorp’s model gives a $135 price target and Stifel’s model sets a $132 target for the shares.

On technicals, the stock has moved below its 25-day exponential moving average and the Average Directional Index has fallen from 43 to 26, a change traders interpret as reduced trend strength. Chart watchers identify two near-term scenarios: the share price could drop toward the lower boundary of the rising broadening wedge near $80 and then rebound, or a breach below that lower boundary could lead to further declines toward about $50.