Rocket Lab (NASDAQ: RKLB) saw its shares climb more than 1% in Thursday trading after the company announced its largest-ever commercial launch agreement. The multiyear contract with Tokyo-based satellite operator Synspective covers 20 additional Electron missions, bringing the total number of launches contracted by Synspective to 47. This makes Synspective Rocket Lab's largest customer by mission count.
The deal, which adds to Rocket Lab's growing backlog, was disclosed alongside Citi's initiation of coverage with a Buy rating and a $105 price target. That target suggests roughly 50% upside from Wednesday's closing price. The stock had gained over 4% in premarket trading but gave back most of those gains after the market opened.
Expanding the Synspective partnership
Under the new agreement, Rocket Lab will deploy 20 StriX synthetic aperture radar satellites into sun-synchronous orbit from its Launch Complex 1 in New Zealand. The missions are scheduled annually between 2028 and 2031, supporting Synspective's goal of building a constellation capable of imaging any location on Earth within hours, regardless of daylight or weather conditions.
This contract provides Rocket Lab with greater visibility into future launch activity as it continues to diversify its customer base across commercial and government sectors. The company operates launch sites in both New Zealand and the United States and offers multiple rocket platforms, including Electron, Haste, and the larger Neutron vehicle.
Citi sees further upside
Citi's initiation highlights Rocket Lab's position as one of only a few companies globally providing regular commercial access to orbit. The brokerage emphasized the established Electron rocket and described the shares as a "core holding for space bulls."
Earlier this week, Cantor Fitzgerald reiterated its Overweight rating and $122 price target, pointing to Rocket Lab's successful launch track record and its diversified business across commercial and government customers. Cantor identified the first launch of the Neutron rocket and the closing of the Iridium acquisition as potential catalysts. Neutron remains under development, with its debut launch date yet to be confirmed, though Cantor has previously positioned it as a potential competitor to SpaceX's Falcon 9.
Financial momentum continues
Rocket Lab's operational progress is reflected in its financial results. Second-quarter revenue jumped 62% year over year to $234 million, while backlog surged 137% to a record $2.36 billion. During the quarter, the company secured $437 million in contracts across its Electron, HASTE, and Neutron programs.
The company is targeting the start of Neutron launches either this year or early next year, subject to development and testing milestones. Despite the recent gains, Rocket Lab shares remain down more than 8% year-to-date, though they have risen about 11% over the past month.
Analysts expect growth to accelerate, with average forecasts calling for annual revenue to rise about 60% to $958 million this year and reach approximately $1.36 billion next year. The latest Synspective agreement adds another long-term source of launch demand as Rocket Lab seeks to convert its growing backlog and launch record into sustained revenue growth.
This article is for informational purposes only and does not constitute financial advice.
