Rocket Lab Corporation RKLB shares have risen 34.8% over the past three months, outperforming the Zacks Aerospace-Defense Equipment industry’s growth of 10.7%. The company is strengthening its position through new government mission awards, rising defense demand and an expanding integrated space systems business, supporting long-term growth.
Meanwhile, stocks like Curtiss-Wright Corporation CW and TransDigm Group Inc. TDG have underperformed the industry during the same period. Shares of CW and TDG have risen 8.8% and 10.3%, respectively.
With RKLB shares rallying strongly over the past three months, investors may be wondering whether the stock still has room to run. Let's examine the factors and assess the stock's investment prospects to make an informed decision.
Risks to RKLB's Growth
Rocket Lab remains exposed to customer concentration and government spending risks, as a significant portion of its launch and space systems revenues is generated from U.S. government agencies and defense-related programs. Any reduction in government budgets, contract delays, funding shifts or changes in procurement priorities could affect future order flow and revenue visibility. The company also faces the risk of contract modifications or cancellations, particularly for long-duration government programs.
Rocket Lab operates in a highly competitive and capital-intensive industry that requires continued investment in research, manufacturing and infrastructure. The company must consistently innovate to maintain its technological edge while managing rising operating costs. At the same time, increasing competition from established launch providers and emerging space companies could intensify pricing pressure, reduce market share opportunities and weigh on long-term profitability.
Rocket Lab's business also depends on the successful execution of complex launch missions and spacecraft operations, where technical failures, launch delays or mission anomalies could affect customer confidence and future demand. Although the company has built a strong launch track record, any significant operational setback could increase costs, delay customer programs and adversely impact its reputation and long-term financial performance.
Factors Supporting RKLB's Growth
Rocket Lab continues to strengthen its position in the government space market through new mission awards and long-term defense programs. In June 2026, NASA selected the company to launch two Sun-Earth science missions aboard Electron, reinforcing Rocket Lab's reputation as a trusted launch provider for complex scientific payloads. The award further expands its civil space portfolio while supporting a steady pipeline of future launch opportunities.
The company is also benefiting from the rising demand for national security space capabilities. In May 2026, Rocket Lab secured a $90-million contract from the U.S. Space Force to design and build two Geostationary Earth Orbit satellites equipped with space domain awareness payloads. The program expands the company's role beyond launch services into higher-value spacecraft manufacturing and strengthens its presence in the rapidly growing defense space market.
Earnings Estimates for RKLB Stock
The Zacks Consensus Estimate for RKLB’s 2026 earnings per share (EPS) indicates a decline of 20% over the past 60 days.
The Zacks Consensus Estimate for Curtiss-Wright’s 2026 EPS calls for a rise of 0.73% in the past 60 days. The estimate for TransDigm Group’s fiscal 2026 EPS implies an increase of 1.68% over the same period.
RKLB Stock’s Poor ROIC
The image below shows that RKLB stock’s trailing 12-month return on invested capital (ROIC) not only lags the peer group’s average return but also reflects a negative figure. This suggests that the company's investments are not yielding sufficient returns to cover its expenses.
Liquidity Position of RKLB
RKLB has a current ratio of 4.48 compared with its industry’s average of 2.36. The ratio, being more than one, indicates that RKLB possesses sufficient capital to pay off its short-term debt obligations.
Its industry peers, Curtiss-Wright and TransDigm Group, also maintain current ratios above one. CW has a current ratio of 1.52, while TDG holds 3.52.
RKLB Stock Trades at a Premium
Rocket Lab is currently trading at 48.96X, a premium compared to its industry’s 14.52X on a forward 12-month Price/Sales basis.
What Should an Investor Do?
Despite benefiting from new government mission awards and growing defense opportunities, Rocket Lab continues to face risks related to customer concentration, government spending, intense competition and execution of complex launch missions. The stock has outperformed the industry in recent months and continues to trade at a significant premium to peers. At the same time, weakening earnings estimates and a negative ROIC indicate that Rocket Lab's investments have not yet translated into consistent profitability. Given these factors, investors may consider avoiding the stock at current levels.
RKLB currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
7 Best Stocks for the Next 30 Days
Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."
Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.9% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Rocket Lab Corporation (RKLB): Free Stock Analysis Report
Transdigm Group Incorporated (TDG): Free Stock Analysis Report
Curtiss-Wright Corporation (CW): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research