Rocket Lab USA, a prominent player in the space industry, recently encountered a significant hurdle, highlighting the challenges faced by companies and investors alike.
On Monday, a Rocket Lab mission from New Zealand’s launch complex aimed to place an Earth-imaging satellite into orbit for Capella Space. Unfortunately, approximately three minutes after the first-stage rocket separation, an issue arose with the second stage, resulting in the loss of the mission.
This outcome undoubtedly comes as a disappointment for Rocket Lab. In a press release, they expressed their deep regret to their partners at Capella Space over the mission’s failure.
As a consequence, Rocket Lab’s stock has seen a premarket decline of approximately 22%, trading at $3.94 per share. Meanwhile, S&P 500 and Nasdaq Composite futures show modest gains of around 0.1%. Prior to this setback, Rocket Lab’s shares had experienced a year-to-date increase of approximately 34%.
Before this failed attempt, Rocket Lab had achieved an impressive track record, successfully launching 171 satellites across 37 missions. Particularly notable for a startup, they conducted their first commercial launch in 2018 and proceeded to complete nine launches in 2022 and eight in 2023.
In comparison, United Launch Alliance (ULA), the joint venture of aerospace giants Boeing and Lockheed Martin, has carried out roughly 150 successful missions since 2006. ULA had eight launches in 2022 and has completed two thus far in 2023.
Despite Rocket Lab’s progress, it remains far behind SpaceX, led by entrepreneur Elon Musk. SpaceX has accomplished over 260 launches, including more than 60 in 2023 alone.
While Rocket Lab’s achievements are commendable, they will unlikely have an immediate positive effect on the stock, given this setback. Furthermore, future missions will undoubtedly face delays, impacting sales projections for 2023. Wall Street analysts anticipate approximately $77 million in sales for the third quarter and $98 million for the fourth quarter. Sales are expected to reach around $430 million in 2024, up from an estimated $291 million in 2023.
These figures are subject to adjustments as Rocket Lab addresses the issues that led to the mission failure, introducing an element of uncertainty for investors. Uncertainty is generally unfavorable for investors, particularly in the space industry, which demands a higher level of certainty than most.
