Rocket Lab USA Q3 preview: What to Expect

Rocket Lab USA (RKLB [https://seekingalpha.com/symbol/RKLB]) is set to report third quarter earnings on Monday, and investors will be watching out for growth in the company’s Space Systems segment and Archimedes engine production.

Wall Street expects the space launch company to post EPS of -$0.06, while revenue expected to increase 44.8% to $151.72 million during the quarter.

KeyBanc Capital Markets rated RKLB as Overweight and raised its price target to $75 from $50, saying that RKLB's strong cash position supports its ongoing growth investments, potential M&A, and future space endeavors.

“Additionally, RKLB is solidifying itself as a national security asset via its reliable access to space and hyper sonics initiatives,” highlighted KeyBanc Capital Markets analyst Liam Baker.

Seeking Alpha analyst Dair Sansyzbayev also rated [https://seekingalpha.com/article/4839283-rocket-lab-not-too-early-not-too-late] the stock as Buy, saying that despite high valuation and ongoing cash burn, RKLB's limited direct competition with SpaceX and high entry barriers justify a premium multiple for long-term investors.

“RKLB's dual segments - Launch Services and Space Systems - are both growing, with expanding gross margins and a robust backlog supporting future revenue acceleration,” added Sansyzbayev.

Over the last one year, RKLB has beaten EPS estimates [https://seekingalpha.com/symbol/RKLB/earnings/eps-surprise-summary] 0% of the time and has beaten revenue estimates 50% of the time.

Over the last three months, EPS estimates have seen two upward revisions [https://seekingalpha.com/symbol/RKLB/earnings/revisions] against two downward moves, while revenue estimates have seen seven upward revisions versus three downward revisions.

As per the Seeking Alpha's Quant Ratings [https://seekingalpha.com/symbol/RKLB/ratings/quant-ratings], RKLB has a Hold rating with a score of 3.26 out of 5. The company received A+ for momentum and B+ for growth, but a D- grade in profitability and an F grade in valuation weighed on the overall rating.

However, Seeking Alpha analysts and Wall Street analysts remain bullish, maintaining Buy [https://seekingalpha.com/symbol/RKLB/ratings/author-ratings] rating on the company.

Shares in the company have surged nearly 95% since the start of the year, outperforming the broader S&P Index, which has gained over 14% during the same period.

MORE ON ROCKET LAB USA

* Rocket Lab: Not Too Early, Not Too Late [https://seekingalpha.com/article/4839283-rocket-lab-not-too-early-not-too-late]
* Rocket Lab: Why This Stock Is A Long-Term Winner [https://seekingalpha.com/article/4835371-rocket-lab-why-this-stock-is-a-long-term-winner]
* Rocket Lab's Neutron: The Catalyst For A Correction? (Earnings Preview) [https://seekingalpha.com/article/4833958-rocket-lab-stock-neutron-catalyst-for-correction-earnings-preview]
* ClearBridge SMID Cap Growth Strategy adds CRDO, RKLB, exits OSCR, RARE [https://seekingalpha.com/news/4503479-clearbridge-smid-cap-growth-strategy]
* Rocket Lab could challenge SpaceX sooner than expected - Morgan Stanley [https://seekingalpha.com/news/4503615-rocket-lab-could-challenge-spacex-sooner-than-expected---morgan-stanley]