Rocket Lab USA, Inc. (NASDAQ:RKLB) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Rocket Lab USA, Inc., a space company, provides launch services and space systems solutions for the space and defense industries. With the latest financial year loss of US$183m and a trailing-twelve-month loss of US$181m, the US$2.6b market-cap company alleviated its loss by moving closer towards its target of breakeven. As path to profitability is the topic on Rocket Lab USA's investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

Rocket Lab USA is bordering on breakeven, according to the 11 American Aerospace & Defense analysts. They expect the company to post a final loss in 2025, before turning a profit of US$2.5m in 2026. The company is therefore projected to breakeven around 2 years from now. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 59%, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving Rocket Lab USA's growth isn't the focus of this broad overview, but, take into account that generally a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before we wrap up, there's one issue worth mentioning. Rocket Lab USA currently has a relatively high level of debt. Typically, debt shouldn't exceed 40% of your equity, which in Rocket Lab USA's case is 85%. Note that a higher debt obligation increases the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of Rocket Lab USA which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Rocket Lab USA, take a look at Rocket Lab USA's company page on Simply Wall St. We've also put together a list of important factors you should look at:

1. Valuation: What is Rocket Lab USA worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Rocket Lab USA is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Rocket Lab USA's board and the CEO's background.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com