Rocket Lab USA (RKLB) Performance Drivers & Valuation vs. Space Tech Peers

Rocket Lab USA (RKLB) has delivered robust 2025 stock performance, driven by a combination of financial milestones, strategic defense contract wins, and technological progress [0]. Financially, the company reported record Q3 2025 revenue of $155.08M (48% year-over-year growth) with a 37% GAAP gross margin, alongside narrowing net losses ($18.3M vs. $52M in Q3 2024) due to operational efficiency gains [0]. Operationally, it completed 21 successful Electron rocket launches (100% success rate) in 2025, setting a new annual record [0][1].

A critical growth catalyst has been RKLB’s expansion into defense space contracts. In December 2025, the company was awarded an $816M prime contract from the U.S. Space Development Agency (SDA) to build 18 missile-defense satellites, its largest-ever contract [2]. This award doubled RKLB’s Space Systems backlog to $1.4B, pushing total SDA contract value over $1.3B and solidifying its position as a defense space prime [3].

Technologically, the Neutron rocket—RKLB’s medium-lift, reusable competitor to SpaceX’s Falcon 9— is on track for an early 2026 maiden launch, which will expand its capabilities to serve larger launch markets and deploy entire satellite constellations [4].

In terms of valuation, RKLB trades at a P/B ratio of 31.09x (market cap $38.64B) as of 2025-12-24, a significant premium to peers like Planet Labs (PL: 14.18x, market cap $6.10B) and BlackSky (BKSY: 8.21x, market cap $758.49M) [0]. This premium reflects investor confidence in its defense contract pipeline, Neutron rocket potential, and vertically integrated business model [0].

1. Defense Transition as a Growth Driver
   : RKLB’s shift from a niche launch provider to a defense prime has unlocked access to high-margin government contracts previously dominated by legacy aerospace firms, directly contributing to its 2025 stock surge [2].
2. Valuation Premium Justification
   : The 31.09x P/B ratio is supported by RKLB’s clear path to revenue expansion (Neutron rocket, $1.4B backlog) and improving profitability, distinguishing it from smaller peers with less diversified revenue streams [0].
3. Long-Term Market Expansion
   : The Neutron rocket enables RKLB to enter the medium-lift launch market, a segment larger than its current small-lift focus, providing a significant long-term growth runway [4].

1. Valuation Correction Risk
   : The high P/B ratio implies substantial future growth expectations; any delays in Neutron development or contract execution could trigger a valuation correction [0][2].
2. Competitive Pressures
   : SpaceX remains the dominant player in the launch market, and legacy aerospace companies (Boeing, Lockheed Martin) are expanding their space capabilities, posing competitive threats [1].
3. Contract Execution Risk
   : The $816M SDA contract requires timely delivery of advanced satellites; delays may harm RKLB’s reputation and future government contract opportunities [2].
4. Cash Burn Risk
   : Negative free cash flow (-$69.4M in the latest quarter) from Neutron development and infrastructure expansion could strain the balance sheet [0].

1. Defense Space Market Growth
   : The SDA’s planned satellite constellations (estimated $1T total value) offer long-term contract opportunities [3].
2. Medium-Lift Launch Market Access
   : Entry into the medium-lift launch market (projected $30B by 2030) could double RKLB’s addressable market [0].

• RKLB’s 2025 YTD return of +201.81% is driven by record financial performance, strategic defense contracts, and the upcoming Neutron rocket launch [0].
• Its P/B ratio (31.09x) is 2-3 times higher than space tech peers, reflecting investor optimism about its diversified growth drivers [0].
• Long-term investment potential depends on successful Neutron deployment and defense contract execution, while short-term risks include valuation volatility and execution challenges [0][2][4].