Rocket Lab USA, Inc.

Rocket Lab USA, Inc. (NASDAQ: RKLB) is engaged in space, building rockets, and spacecraft. It provides end-to-end mission services that provide frequent and reliable access to space for civil, defense, and commercial markets. It designs and manufactures the Electron and Neutron launch vehicles and Photon satellite platform.

Key Highlights:

• The company reported a 237% y-o-y growth in revenue to USD 29.472 million in H1FY21. Despite a robust topline, the company reported a net loss of USD 32.547 million, which widened from USD 23.452 million in pcp. The group encountered higher input costs due to research & development expenses, increased launch costs and production costs.
• Backlog jumped 136% y-o-y to USD 141.4 million in H1FY21, and the company launched three missions during the first half of FY21.
• Moreover, the company entered into an agreement with Kinéis for five Electron launches to deploy their entire constellation of 25 satellites.
• Recently, the stock witnessed a healthy rally on the daily price chart and has moved above the upper band of the Bollinger Bands®, indicating the stock is perhaps overbought and due for a price correction or a consolidation. Furthermore, the momentum oscillator RSI (14-Period) is trading at ~77.5 levels, which also indicates that the stock is in overbought zone and there is a deep possibility of price consolidation or correction.

One-Year Technical Price Chart (as on September 08, 2021). Analysis by Kalkine Group

Stock Recommendation: The company offers integrated services related to launching services, spacecraft components, satellites and other spacecraft and on-orbit management solutions and has delivered 105 satellites to orbit for private and public sector organizations. The company has two launch pads at a private orbital launch site located in New Zealand, and a lockdown alert in the country due to the Delta variant outbreak would lead to a delay in the launch activity planned in Q3FY21. Moreover, widening net losses have dampened the company’s financial health, which remains a key concern for the company. Also, technical indicators are reflecting a possibilities of a possible price correction or consolidation. Hence, considering the above factors, we give a ‘Watch’ stance on the stock at the closing price of USD 15.09 on September 08, 2021.

*The reference data in this report has been partly sourced from REFINITIV.