When Can We Expect A Profit From Rocket Lab USA, Inc. (NASDAQ:RKLB)?

Rocket Lab USA, Inc. (NASDAQ:RKLB) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Rocket Lab USA, Inc., a space company, provides launch services and space systems solutions for the space and defense industries. The US$2.8b market-cap company posted a loss in its most recent financial year of US$183m and a latest trailing-twelve-month loss of US$181m shrinking the gap between loss and breakeven. As path to profitability is the topic on Rocket Lab USA's investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.

Check out our latest analysis for Rocket Lab USA

Rocket Lab USA is bordering on breakeven, according to the 11 American Aerospace & Defense analysts. They expect the company to post a final loss in 2025, before turning a profit of US$11m in 2026. The company is therefore projected to breakeven around 2 years from now. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 59%, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Given this is a high-level overview, we won’t go into details of Rocket Lab USA's upcoming projects, however, keep in mind that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we would like to bring into light with Rocket Lab USA is its relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in Rocket Lab USA's case is 85%. Note that a higher debt obligation increases the risk in investing in the loss-making company.

Next Steps:

There are too many aspects of Rocket Lab USA to cover in one brief article, but the key fundamentals for the company can all be found in one place – Rocket Lab USA's company page on Simply Wall St. We've also compiled a list of pertinent factors you should further examine:

1. Valuation: What is Rocket Lab USA worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Rocket Lab USA is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Rocket Lab USA’s board and the CEO’s background.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com