Rocket Lab prices 17 times 2027 combined sales before Neutron flies or Iridium closes. I see 27% downside to $40.06 on slower payoff and dilution.
Key points
- $37.9 billion of pro forma value for 2027 prices a fast Neutron ramp plus Iridium gains before either one pays.
- $2.22 billion of combined sales for 2027 in my model still leaves the stock at 17 times sales for 2027.
- Neutron slipped into 2027 while cash burn held near $110 million a quarter in 2026 and shares grew.
The call
The market is too optimistic. At $55.25 on October 15 2026 the shares carry about $37.9 billion of pro forma value for 2027, where pro forma means including the Iridium deal. That value needs about 17 times my $2.22 billion of combined sales for 2027.
Quarterly revenue with my forecast ($ millions)Source: SEC XBRL facts to Q2 FY26; Q3 FY26E-Q4 FY27E mine. Oct 15 2026.
I see slower payoff instead. Neutron slipped into next year while cash burn stayed near $110 million a quarter in 2026. After recent dilution, I value the shares at $40.06 for October 2027.
Valuation
| Item | Figure |
|---|
| 2027 Rocket Lab sales | $1.30 billion |
| 2027 Iridium sales | $0.92 billion |
| Combined 2027 sales | $2.22 billion |
| Combined cash profit for 2027 | $440 million |
| Target multiple and value for October 2027 | 12.5 times sales, $40.06 |
What the target is worth at each sales multipleSource: my estimates; 670.1M pro forma shares. Oct 15 2026.
I allow 12.5 times sales for 2027 for fast growth plus a rare network. That still leaves about 27 percent downside to October 2027. That gap drives a strong sell.
Risks
- Neutron flies on time in 2027 and quickly books paid medium lift work, seen in a dated test success and a firm launch manifest in 2027.
- Iridium closes fast in 2027 with clear cash savings and steady subscriber sales, seen in proxy votes and regulatory approvals in 2027.
- Electron and Space Systems mix improves in 2027, seen in gross margin above 40 percent in 2027 and much smaller cash burn in 2027.
What would change my mind
A successful Neutron launch in 2027 plus a funded Iridium close in 2027 on stated terms would rebuild my sales and cash view.