Rocket Lab stock megaphone pattern; analysts raise targets

Rocket Lab shares have formed a large megaphone pattern on weekly charts after several weeks of volatile trading tied to the SpaceX IPO and the company’s $8 billion acquisition of Iridium. The stock rose to about $151 ahead of the IPO, fell to roughly $80.50 and recovered to near $100 in recent sessions.

Technical indicators show widening Bollinger Bands and larger weekly price swings consistent with a megaphone pattern. The stock currently trades slightly above the bands’ middle line.

Major analysts maintained or increased bullish ratings and price targets in recent weeks. Citigroup kept an outperform rating. Bank of America raised its target to $115 from $105. Citizens Bank increased its target to $130 from $95. Needham and Roth MKM boosted targets to $120 and $130, respectively.

Rocket Lab announced an agreement to acquire Iridium for about $8 billion. Company executives said the deal combines Rocket Lab’s launch and spacecraft manufacturing capabilities with Iridium’s global satellite communications network and will place launch, spacecraft, spectrum and on-orbit communications within one company. Management noted the company expects to reduce reliance on third-party launches.

Iridium’s reported annual revenue rose from $614 million in 2021 to $871 million last year. Net income moved from a $9.3 million loss in 2021 to $114 million last year. Iridium reported a gross margin near 71% and a net income margin around 12%. Rocket Lab’s gross profit margin is about 36%.

Analysts forecast accelerating revenue at Rocket Lab as its Neutron medium-to-heavy lift vehicle scales. The average estimate for second-quarter revenue is roughly $231 million, about 60% higher year over year, and third-quarter revenue is estimated near $236 million, a 52% increase. Full-year revenue estimates center near $914 million, with a consensus forecast of roughly $1.3 billion next year.

Company filings show a backlog of about $2.2 billion and quarterly revenue that rose 63.5% to $200.3 million. Management reported the Neutron order book is growing and that the vehicle’s manifest extends through the end of the decade. Rocket Lab is participating in projects such as the Golden Dome initiative.

Market participants cited integration outcomes with Iridium, Neutron development and manifest execution, combined margin improvement and overall space-sector sentiment after the SpaceX IPO as potential factors that could affect the stock. Traders and analysts continue to reference prior highs near $150 when assessing upside and risk.