Rocket Lab Stock Gets Citi Upgrade Post Strong Q2 Earnings: Pushes Retail Sentiment Into ‘Extremely Bullish’ Territory

Shares of Rocket Lab USA (RKLB) received an upgrade from Citigroup that maintained a ‘Buy’ rating on the stock while raising its price target to $7.00 from $5.45. Shares of the company closed over 12% higher on Thursday and were up 1.5% in Friday’s pre-market trading.

The brokerage gave a higher valuation multiple noting the development of the company’s new medium lift rocket Neutron and the successful completion of the first hot fire for the Archimedes engine.

Rocket Lab USA is currently the third most trending ticker on Stocktwits as per data on Friday morning with retail sentiment shifting into the ‘extremely bullish’ territory (81/100) from the ‘bullish’ zone (57/100). The move was accompanied by high message volume.

Rocket Lab’s upgrade comes after the firm reported record second-quarter revenue, which rose 71% year-over-year (YoY) to $106.251 million, while net loss narrowed to $41.63 million from $45.89 million a year earlier. The firm also launched its 50th Electron mission and claimed that it reached 50 launches faster than any commercially developed rocket in history.

For the third quarter, the firm expects revenue of $100 million to $105 million and adjusted EBITDA loss of $31 million to $33 million. GAAP gross margins are expected between 25% and 27% while non-GAAP gross margins are estimated between 30% and 32%.

Rocket Lab had a series of positive updates alongside its earnings report. Notably, the company completed production of two spacecraft for NASA’s ESCAPADE mission to Mars, set to launch this year. Additionally, it secured preliminary terms for $49.40 million in state and federal funding, including a portion from the CHIPS Act, to expand solar cell production in Albuquerque, New Mexico.

The order pipeline also looks good, with the firm disclosing that it has more than $720 million in spacecraft under contract.

Stocktwits users with a bullish stance on the firm are highlighting the importance of the Mars mission for the company.