Veteran analyst revamps Rocket Lab stock price target | Official Website of Louis Velazquez, entrepreneur, finance guy and tech innovator

Rocket Labs USA (RKLB) has been in full focus since it reported Q1 earnings last week, but that’s not the only reason investors are watching it closely.

The space exploration and technology company is considered a competitor to Elon Musk’s SpaceX and has enjoyed significant growth over the past year, rising from less than $5 per share to its current price of almost $22.

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Since the stock is up more than 400% for the year, it’s been hard for investors not to pay attention.

One veteran Wall Street analyst has been bullish on Rocket Labs for some time, even as others have speculated that its growth may not be sustainable. He recently revamped his RKLB stock price target, laying out several key advantages of the company as it prepares for a pivotal chapter.

Space tech breakout stock Rocket Labs USA has surged recently, and one analyst has updated his price target.

Image source&colon; Rocket Lab USA

One investing expert isn’t holding back in his Rocket Lab take

Stephen “Sarge” Guilfoyle, a veteran Wall Street analyst with more than 30 years of experience on the trading floor of the New York Stock Exchange (NYSE), follows Rocket Labs closely. After the company’s strong Q1 earnings report, he increased his price target, citing multiple positive catalysts.

Guilfoyle increased his RKLB stock price prediction from $28 to $30 per share, not a significant increase but still implying quite a bit of upside potential. The analyst maintains a long position in the stock.

As he notes, the company came in above Wall Street estimates on both top and bottom-line metrics with a sale spring that led to 321% year-over-year (YOY) growth.

Additionally, Guilfoyle highlights that Rocket Labs reported $80.804 million in product revenue and $41.765 million in service revenue, gains of 49.2% and 8.1%, respectively. Those factors are encouraging on their own, but Guilfoyle also sees several positive attributes that are likely to help contribute to the company’s growth in the coming year.

“During the quarter, the firm successfully on-ramped the Neutron rocket to the Department of Defense’s $5.6 billion national Security Space Launch program (Phase 3, lane 1),” he states, adding that Rocket Labs also pulled off five successful Electron mission launches for three different commercial satellite constellation operators.

That’s far from the only key update from Rocket Labs, though. Guilfoyle also highlights a recent news update in which the company revealed it will be joining a cargo mission with the U.S. Air Force Research Lab to launch a medium-lift reusable Neutron rocket.

“The launch contract will test Neutron’s survivability in an experiment as the Department of Defense (DoD) looks to expand space cargo delivery capabilities using commercial providers,” he predicts.

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As he notes, several other analysts have reiterated “buy” ratings on RKLB since the company reported earnings on May 8. Both Andres Sheppard of Cantor Fitzgerald and Erik Rasmussen of Stifel Nicolaus increased their price targets, which now imply upside potential of almost 33%.

Of the analysts who recently reiterated either “buy” or buy-equivalent ratings, none maintains a forecast as high as Guilfoyle’s.

Despite some risk, Guilfoyle sees Rocket Labs as a winner

That’s not to say there aren’t certain risks with Rocket Labs. The company is projecting revenue for the year between $130 million and $140 million. As Guilfoyle notes, this comes up short compared to the $137 million that analysts have set for it. He speculates that this is likely the reason for the risk-off reaction to the Rocket Labs earnings on Friday, May 9.

The analyst adds that while he sees the quality of the company’s balance sheet as highly positive, it is important for Rocket Labs’ cash flow to improve in the near future.

Even so, Guilfoyle remains bullish on RKLB stock, concluding that overall, he is impressed by the company’s consistent revenue growth.

“The continued engagement with the U.S. Department of Defense is encouraging, and the potential for truly lucrative deals moving forward both in launch services and in hypersonic weapons delivery is reason enough for me to not only stay invested but grow my investment on weakness,” he states.