Rocket Lab (NASDAQ: RKLB) shares have entered a steep decline, falling more than 12% on July 16 to their lowest level since April 13. The rout has erased 55% of the stock's value from its 2025 peak, slashing the company's market capitalization from approximately $86 billion to around $40 billion.
The sell-off is part of a broader downturn across the space industry. SpaceX, the largest private space firm, has dropped to its IPO price this week, wiping out over $1 trillion in market value. Planet Labs has fallen to $22 from a year-to-date high of $51, while Virgin Galactic has plunged from $9 in June to $2.60. The Procure Space ETF (UFO) has declined to $43 from its 2025 high of $68.
Investors appear to be taking profits after a strong rally earlier this year, with the UFO ETF having surged 360% from its 2024 low before the recent pullback. The weakness has been exacerbated by SpaceX's post-IPO performance, prompting a broad rotation out of space stocks.
Analysts Remain Bullish Despite Sell-Off
Despite the sharp decline, most Wall Street analysts maintain a positive outlook on Rocket Lab. Morgan Stanley has reiterated its overweight rating, Citigroup maintains its outperform position, and Bank of America raised its price target from $105 to $110. Citizens and Roth have set targets of $130, all well above the current trading price.
Rocket Lab's fundamentals provide some support for this optimism. The company reported $200.3 million in revenue last quarter, up 63% year-over-year. Its backlog grew 20% to $2.2 billion, driven by orders for its Electron, HASTE, and Neutron launch vehicles. The company achieved five dedicated Neutron flights during the quarter.
The recent announcement of an $8 billion acquisition of Iridium is a key catalyst. The deal aims to create a vertically integrated space company that designs satellites, manufactures spacecraft components, and launches rockets. Iridium's global satellite communications network and L-band spectrum could provide recurring, high-margin revenue and help Rocket Lab compete with SpaceX's Starlink.
Technical Analysis Points to Further Downside
The weekly chart shows RKLB has fallen from a record high of $151 to the current $67. The stock has broken below the 50% Fibonacci retracement level and is approaching the 61.8% retracement point, a zone where rebounds often occur. It has also dropped below the 50-week moving average, and the Relative Strength Index has moved below the neutral 50 level.
These technical signals suggest the stock could decline further, potentially reaching $60 or $50 before finding support. A rebound may materialize around the company's next earnings release, when investors will assess the Iridium acquisition progress and revenue growth trajectory.
For context on recent price action, see our earlier coverage: Rocket Lab Stock Drops 25% Into Local Bear Market: Key Support at $100 and Rocket Lab Stock: Technicals and Business Momentum Signal Potential Rebound.
Analysts project Rocket Lab's revenue will grow 52% this year to $919 million, reaching $1.28 billion in 2026. The Iridium acquisition, if completed, could accelerate this growth and improve margins. However, near-term price action remains driven by sector-wide profit-taking and technical selling pressure.
This article is for informational purposes only and does not constitute financial advice.
