Rocket Lab (NASDAQ: RKLB) closed recently at around $30 per share, resulting in a a market valuation near $13.9 billion after a twelve‑month surge of more than 400%.
Yet the day‑to‑day price action tends to obscure how differently this business is evolving from the “mini‑SpaceX” caricature many investors still hold.
To get a clearer picture of where the stock might be by 2030, we need to start with what Rocket Lab actually looks like today and why the next 18–24 months represent a genuine inflection point.
Rocket Lab Sells Far More Hardware than Launches
In the first quarter of 2025 Rocket Lab posted $122.6 million in revenue, up 32% year over year. Crucially, only $35.6 million came from Electron launches; the other $87 million, about 71%, was generated by Space Systems, a segment that designs and manufactures everything from reaction wheels to complete spacecraft buses.
The market narrative still revolves around the cadence of small‑sat launches, but the company’s backlog tells a different story.
As of Q1, the order book hit $1.067 billion, with $645 million tied to Space Systems and $422 million to launch services.
Investors who dismiss Rocket Lab as “just another launch startup” are missing the fact that management has quietly built a vertically integrated parts‑to‑platforms business whose economics look more like a specialty‑aerospace manufacturer than a pure play rocket operator.
Neutron Is the Medium‑lift Wildcard
The medium‑lift Neutron rocket remains the single biggest swing factor in any five‑year forecast. In March SpaceNews reported that Rocket Lab still expects a first Neutron flight in late 2025, despite a short‑seller note claiming “no chance” the vehicle flies before 2027.
Why the drama? Neutron is designed to loft up to eight metric tons to LEO, roughly 20× what Electron can carry, and to do so with 80% of its structure and all seven Archimedes engines produced through large‑format additive manufacturing, a playbook it perfected on the Rutherford engine, whose components are already approximately 85% 3‑D printed.
If Neutron hits its cost targets, management says gross margins could eventually climb into the high‑40% range, well above the low‑30s Rocket Lab generates today. But it will not be cheap because industry analysts estimate $300‑$600 million of additional capital is needed to bring Neutron to steady‑state operations.
Space Systems Are An Overlooked Cash Engine
While Wall Street handicaps Neutron schedules, the real near‑term growth driver is a $515 million contract from the Space Development Agency to build and operate 18 Tranche 2 Transport Layer “Beta” satellites. Rocket Lab passed preliminary design review in January 2025, clearing the program to move into detailed design and early hardware.
That single contract alone is roughly equal to all the revenue management booked in 2024. Because Rocket Lab supplies its own reaction wheels, star trackers, radios and composite structures, management expects mid‑30‑percent program‑level margins, higher than most aerospace primes earn on similar constellations.
Space Systems’ momentum extends beyond defense. The Photon bus recently selected for NASA’s ESCAPADE Mars mission is scheduled to depart as soon as the 2025 Mars window opens, putting Rocket Lab on a very short list of companies that can deliver interplanetary spacecraft as a commercial service.
Every successful deep‑space delivery enhances the value of the product catalog, something the broader market rarely factors into valuation models that assume Rocket Lab’s addressable market tops out in Low Earth Orbit.
Cash flow, Margins and the Glide Path to Profitability
The near‑term P&L still bleeds red ink, but the trajectory is finally bending. Management guided to second‑quarter 2025 revenue of $130–140 million and GAAP gross margins of 30–32%, implying a step‑change from the high‑20s margins of 2024 even before Neutron contributes a dime.
Wall Street now models more than $900 million in sales by 2026 and, for the first time, positive free cash flow in that same year, with GAAP profitability following in 2027. Those estimates assume Neutron flies no earlier than mid‑2026, but they also assume Space Systems continues its high‑double‑digit growth, something investors often gloss over.
Put another way: if Neutron slips but the satellite factory keeps humming, Rocket Lab still has a realistic path to break‑even within 24 months. If Neutron arrives on time, the free‑cash‑flow inflection could come a full year sooner, because each Neutron launch is forecast to generate roughly $20–25 million in gross profit, or about two full quarters of what Electron contributes today.
What the Market Is Missing
There is no sugar‑coating the execution risk. Building a reusable medium‑lift launcher is capital intensive, and short sellers are right that Rocket Lab may need to raise more equity before Neutron becomes cash generative.
The program also competes head‑to‑head with SpaceX Falcon 9 rideshare pricing and with upcoming small‑lift entrants like Relativity’s Terran R. A further risk: the U.S. Air Force is debating whether to scale back parts of the SDA Transport Layer, raising the possibility, still remote but worth monitoring, that future tranches could be reduced or re‑competed.
On the other hand, certain upside catalysts rarely get airtime. Analysts at Cantor Fitzgerald argue that the recent friction between Elon Musk and policymakers could steer incremental government awards toward alternative providers, with Rocket Lab near the front of the line. Another is the engine‑reusability program on Electron.
It’s already flown recovered Rutherford engines on multiple missions and management suggested they’d re‑fly an entire first stage within the next 12 months. Even a modest reduction in Electron cost per launch, currently estimated near $6 million, will push launch gross margins into the low‑40s and open up incremental cash to help fund Neutron.
Where Will RocketLab Stock Be In 5 Years?
According to the majority of analysts covering RocketLab, the risk now is to the downside with $28.29 per share the consensus fair value.
Rocket Lab currently trades at roughly 15× trailing‑twelve‑month sales. Were management merely to hit their 2027 target of $1.8 billion in revenue and margins mushroom to the mid‑40s once Neutron is flying regularly, a 4–6× sales multiple, in line with mature aerospace peers, would translate to a market cap of $7–11 billion.
That math suggests downside if execution stumbles. Conversely, a material win for Neutron in the medium‑lift segment and Space Systems secures follow‑on SDA and NASA orders translates to Rocket Lab plausibly sustaining a 10× sales multiple on $3 billion of revenue, yielding a $30 billion market cap. On today’s share count, that implies a share price in the $65–$70 range, more than double current levels.
The five‑year bull case hinges on three things now, the first of which is Neutron launching on time and ramping without catastrophic failure, The second is Space Systems converting its $1‑billion‑plus backlog into deliveries while adding new constellations and RKLB reaches positive free cash flow before equity markets close the cheap‑capital window.
Get two out of three right and RKLB could still be a market‑beating investment. Nail all three and the stock has the torque to become a multi‑bagger.
Rocket Lab isn’t just “the other small‑sat launcher” but a vertically integrated space‑hardware vendor with a growing defense franchise, a path to medium‑lift reusability and one of the only commercially proven spacecraft buses capable of deep‑space work. That picture rarely shows up in headline narratives focused on Electron’s next flight or Neutron’s next weld, yet those nuances will determine whether RKLB is a $10 stock or a $70 stock in 2030.
The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.
