In a report released today, Cai von Rumohr from TD Cowen reiterated a Buy rating on Rocket Lab USA (RKLB – Research Report), with a price target of $8.00.
Cai von Rumohr has given his Buy rating due to a combination of factors impacting Rocket Lab USA’s financial and operational prospects. Despite a slight delay in the Neutron launch, Rumohr sees promise in the Electron launch vehicle, which is expected to nearly double its launches by 2024, therefore contributing significantly to the company’s revenue. The first quarter’s successful conversion to cash supports potential mergers and acquisitions, providing Rocket Lab with a strategic cushion for further growth. The company’s vertical integration strategy positions it well within the competitive space launch market, where it can emerge as a key player amidst industry consolidation.
Furthermore, Rocket Lab’s ability to maintain a high launch cadence, despite the industry’s overall challenges, sets it apart from competitors, some of which have faced failures or financial difficulties. This operational resilience, along with an anticipated improvement in adjusted gross margins and cash flow, underpins the expectation of increased profitability and competitive advantage. Looking ahead, von Rumohr anticipates a turnaround in adjusted EBITDA by 2025-26 and recognizes Rocket Lab’s strong cash position, which should enable it to reach profitability and explore accretive acquisitions. This combination of enhanced operational performance and solid financial footing substantiates the Buy rating and $8 price target, which is pegged at eight times the company’s projected 2024 sales.
According to TipRanks, von Rumohr is a 5-star analyst with an average return of 7.0% and a 62.63% success rate. von Rumohr covers the Industrials sector, focusing on stocks such as Triumph Group, Rocket Lab USA, and Boeing.
In another report released on May 10, KeyBanc also reiterated a Buy rating on the stock with a $8.00 price target.
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Rocket Lab USA (RKLB) Company Description:
Rocket Lab (NASDAQ:RKLB) is a space company offering launch services, spacecraft manufacturing, and other solutions, including the management of satellites. Furthermore, its space systems business manufactures spacecraft components.
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