Hataf Capital@hataf_capital
Rocket Lab: Why The Strategic Reset Makes This An Asymmetric Buying Opportunity
I’ve covered Rocket Lab Corporation $RKLB twice before, and both times I came away with a "Hold" rating.
My hesitation wasn't about the technology, but rather the heightened valuation and the lack of concrete updates on the Neutron launch.
In my view, the market was pricing in perfection while the execution roadmap remained opaque. However, time has passed, and I believe we are now looking at a significantly more attractive risk/reward setup.
Between the recent corporate updates, a much-needed valuation reset, and improved financials, the narrative has shifted from "speculative growth" to "strategic execution".
Scaling Beyond Launch
When investors look at Rocket Lab, they often focus solely on the rockets, but the real story is in the margins and the diversification into Space Systems.
In Q4 2025, RKLB’s revenues hit $180 million, a 35.7% YoY increase, beating consensus on both the top and bottom lines.
What is particularly interesting to me is the adjusted gross margin, which improved to 44.3%.
For a hyper-growth company, margin expansion during a scaling phase is the "holy grail."
It proves that the business model is structurally sound. While the Launch services segment grew 85% QoQ, the Space Systems segment which includes satellite manufacturing and components contributed $103.8 million to the top line.
This segment carries structurally higher margins, and its dominance in the revenue mix is exactly what will bridge the gap to GAAP profitability.
RKLB is no longer just a launch provider; it’s becoming the vertically integrated backbone of the new space economy.
From Manual Defects to Automated Precision
One of the primary reasons for the recent stock price correction was the Neutron tank failure in January. I’ve spent time analyzing the management’s commentary on this, and I believe the market has completely misread the situation.
According to the Q4 earnings call, the failure wasn't a structural design flaw; it was a manufacturing defect introduced because the tank was "hand-laid" by a third-party contractor to save time.
Management noted that they are now getting their automated fiber placement (AFP) machine up and running, which should eliminate this manual defect risk moving forward.
By pushing the first Neutron launch to Q4 2026, they have essentially de-risked the pipeline and eased expectations.
I would much rather see a company bring a "robust and thoroughly tested vehicle to the pad" than rush a flawed product to meet an arbitrary deadline.
This strategic reset removes the overhang of unachievable near-term expectations while setting the stage for a massive catalyst late next year.
The SpaceX Benchmark
Reports suggest SpaceX is looking at a valuation of $1.75 trillion. While SpaceX is the clear leader, Rocket Lab is its closest and most viable competitor.
Currently, Rocket Lab is valued at a tiny fraction roughly 2.3% of SpaceX’s projected valuation.
If we look ahead to FY2028, SpaceX might be trading at a forward price-to-sales (P/S) ratio of 35x based on $50 billion in sales.
In contrast, RKLB is trading at just 25x FY2028 sales. If the market decides that a "catch-up trade" is necessary to close even a portion of this gap, the upside for RKLB could be 40% or more just to align with the sector leader’s multiples. The SpaceX IPO will likely set a valuation benchmark that makes RKLB look like a bargain in comparison.
