Rocket Lab’s Stock (NASDAQ: RKLB) Takes Off After Citigroup Upgrade

Rocket Lab's stock price (NASDAQ:RKLB) is up in extended hours by 3.77%, moving the stock back above $6 and into the green on a YTD basis. RKLB experienced a significant upswing in regular trading yesterday, adding 12.55% to make it one of the big daily movers on the Nasdaq. So why the sudden launch for Rocket Lab?

Analysts for one like the stock, and following an upgrade from Citigroup, the attention continues to build. Citi raised its price target on the aerospace manufacturer’s stock, boosting it from $5.45 to $7.00. This bullish stance by Citigroup fuelled investor optimism, which saw a corresponding increase in volume, and price.

The company witnessed 23.5million shares changing hands during the day, up significantly (more than 3x) from the average daily volume of 6.86million. This heightened activity underscores the impactful nature of analyst upgrades and the acute investor focus on industry-related developments.

The positive sentiment around Rocket Lab isn't just limited to Citigroup’s revised outlook. The company also announced it had begun work on the largest automated fibre placement machine of its kind into the Company’s Neutron rocket production line. Alongside Citi, multiple research analysts have weighed in on the stock, resulting in a total of four analysts categorizing it as a hold, while six others have recommended it as a buy.

Rocket Lab's recent earnings also lend support to the positive assessments. The company reported quarterly revenue of $106.25 million, close to the consensus estimates. It was in the EPS metric that the company impressed, with its reported earnings per share of ($0.05) beat the consensus estimate of ($0.07) by $0.02, representing a positive surprise of almost 30%.

The services provided by Rocket Lab, which include launch services, spacecraft design, and the manufacturing of spacecraft components and rockets, cater to the diverse needs of the space and defense industries. As global interest in space exploration and security continues to grow, companies like Rocket Lab stand to benefit from the expanding market opportunities.

Analyst confidence and the company’s recent financial results paint a promising picture for the future, but there is plenty of risk in the sector. As always, ensure you consider any position within the totality of your portfolio, and be sure that all the metrics meet your desired levels before you make decisions.