TD Cowen Lowers Rocket Lab Price Target but Keeps Buy Rating
TD Cowen reduced its Rocket Lab price target to $90 from $120 on October 9 while maintaining a Buy rating, which implies about 32% upside from the $68.44 share price. Rocket Lab's stock has fallen roughly 54.5% from its May peak as investors focus on Neutron's schedule, cash burn, and competition from SpaceX. The new target would value Rocket Lab at about 46.7 times forward sales, above the current 35.5 times and the five-year average of 21.2 times.
TD Cowen's Gautam Khanna trimmed Rocket Lab's target to $90 from $120 on October 9, still rating it Buy. The stock had closed October 8 at $68.40, down about 54.5% from its May 27 high of $150.23. At that May peak, shares traded near 89.2 times forward sales.
Second-quarter revenue rose 62% year over year to $234 million, with backlog at $2.36 billion. Free cash flow was negative $110.1 million as Neutron development continued. Management aims to deliver Neutron to the pad in Q4, though first launch timing is unclear. Rocket Lab also raised $1.94 billion via an at-the-market offering for its planned Iridium purchase.
Rocket Lab's valuation and Neutron timeline could affect investors, employees, and space-industry suppliers, as well as customers relying on launch and satellite communications services. If execution slips or cash burn persists, financing conditions may tighten for similar space firms, potentially slowing innovation. Conversely, successful Neutron progress and the Iridium deal may expand competition in launch and connectivity, which could benefit commercial and government users through more options.