Shares of tiny rocket-maker Rocket Lab (NASDAQ: RKLB) took a tiny tumble Tuesday morning, sliding 2.7% through 10:55 a.m. ET on what might have been good news for the company.
Last night, NASA announced 15 space companies that will provide it with payload integration services aboard “suborbital rockets, high-altitude balloons, orbital spacecraft and satellites, and, in some instances, suborbital rockets that can accommodate carry people.” Rocket Lab was one of the recipients…but only one of many.
Who got NASA contracts this week?
Among the other winners were many names you’ll certainly recognize if you’re a space investor:
-
Aerostar International
-
Astrobotic Technology
-
Blue Origin
-
Momentus Space
-
SpaceX
-
Spire Global
-
Varda Space
There were also quite a few winners you’ve probably never heard of:
What does this mean for Rocket Lab?
So, why might Rocket Lab investors be reacting negatively to this news? Well, for one thing, the size of the contracts being awarded is somewhat underwhelming — just $45 million to be split 15 ways over a term of five years.
Split evenly, that would be just $600,000 per company per year.
For another, Rocket Lab won’t even be able to compete for much of this work. It doesn’t specialize in balloons, for example. It doesn’t yet have any rockets capable of carrying people, suborbital or otherwise. Companies like SpaceX and Blue Origin will presumably hoover up all those contracts for themselves, along with the bulk of the money.
Long story short, this NASA contract award simply won’t move the needle much at all for Rocket Lab. There’s little reason to get excited — so Rocket Lab investors aren’t.
Should you invest $1,000 in Rocket Lab USA right now?
Before you buy stock in Rocket Lab USA, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Rocket Lab USA wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.
*Stock Advisor returns as of February 26, 2024
Rich Smith has positions in Rocket Lab USA. The Motley Fool recommends Rocket Lab USA. The Motley Fool has a disclosure policy.
Why Rocket Lab Stock Slipped Today was originally published by The Motley Fool