Rocket Lab Beats Earnings and Completes First Full Assembly of Archimedes
Expected EPS
-$0.11
Actual EPS
-$0.09
| Metric | Amount |
|---|---|
| Revenue Q1 2024 | $92.767 million |
| GAAP Gross Margin | 24-26% |
| Non-GAAP Gross Margin | 30-32% |
| GAAP Operating Expenses | $74-76 million |
| Non-GAAP Operating Expenses | $62-64 million |
| Adjusted EBITDA | -$23 to -$25 million |
Rocket Lab (RKLB)
Rocket Lab USA, Inc. has exhibited a strong performance in the first quarter of 2024, displaying a remarkable year-on-year revenue growth of 69%. This significant growth, driven by strategic contracts and key technological advancements, firmly places Rocket Lab as an essential player in the aerospace industry.
Rocket Lab concluded the first quarter of 2024 with revenues totaling $92.767 million, showcasing substantial growth from the previous year. This increase stems from their robust operations in both the Launch Services and Space Systems sectors.
The financial metrics highlight the company’s robust performance, with GAAP Gross Margins ranging between 24% and 26%, and Non-GAAP Gross Margins achieving 30% to 32%.
Operating expenses are indicative of Rocket Lab’s strategic reinvestment into growth, with GAAP expenses between $74 million and $76 million, and Non-GAAP expenses somewhat lower at $62 million to $64 million.
Archimedes Engine Build Complete
Great news for those following the progress of Rocket Lab’s ambitious Neutron launch vehicle: the company has successfully completed the first full assembly of its groundbreaking Archimedes engine. This milestone is a significant step forward in the development of the Neutron rocket, which is set to enhance the capabilities of medium lift launch vehicles with its advanced, reusable technology.
Details on the Archimedes Engine Completion
The assembly of the Archimedes engine, known for its 3D printed components and reusable design, marks a crucial advancement in Rocket Lab’s timeline for Neutron’s debut. The engine, designed for both high performance and sustainability, aims to be reused for up to 20 launches, showcasing Rocket Lab’s commitment to reducing space travel costs and environmental impact.
What’s Next for the Archimedes Engine?
Following this assembly, the Archimedes engine will not rest on its laurels. It is poised to begin an intensive test campaign at the dedicated engine test stand located at NASA’s Stennis Space Center in Mississippi. Here, the engine will undergo a series of tests to validate its performance across various phases of operation, including transient start-up, steady-state performance, and shut down.
Neutron Development
A major highlight of the quarter is the progress on the Neutron rocket. Rocket Lab successfully completed the first build of the Archimedes engine and launched an extensive engine test campaign in Mississippi. These developments are vital as they pave the way to the Neutron’s inaugural flight, projected for no earlier than mid-2025. Significant infrastructure improvements, particularly at the Neutron launch pad in Virginia, underscore Rocket Lab’s dedication to expanding its launch capabilities.
Rocket Lab’s Future Guidance
For the upcoming second quarter of 2024, Rocket Lab forecasts revenue between $105 million and $110 million. The company is poised for continued growth, supported by robust demand in the market and ongoing strategic efforts. The anticipated steady gross margins suggest effective cost management and operational efficiency.
Archimedes’ completion not only serves as a testament to Rocket Lab’s engineering prowess but also sets the stage for the next phases of testing and development. With a keen eye on the first launch scheduled for no earlier than mid-2025, the team at Rocket Lab is geared up to ensure that the Archimedes engine meets all necessary standards for a successful maiden flight.
Rocket Lab’s ongoing efforts to push the boundaries of space technology continue to inspire and pave the way for future innovations in the aerospace industry. The completion of the Archimedes engine is not just a technical achievement—it’s a beacon of the exciting advancements that lie ahead in space exploration.
Editor’s Price Target
As of market close on May 6, 2024, the stock is priced at $4.07. Our analysis projects a significant rise, setting our price target at $9.05 for the year 2024. This represents an upside of approximately 122%, signaling a strong potential for growth. We are optimistic that the stock will exceed this target as the market evolves and the company continues to expand.
Conclusion
Rocket Lab’s Q1 2024 achievements reflect a company on a strong upward trajectory, with substantial revenue growth fueled by increased launch activities and significant defense contracts. The advancements in the Neutron rocket program signify a crucial milestone in Rocket Lab’s expansion, aiming to elevate their capabilities in the aerospace sector. With a solid financial foundation and strategic technological advancements, Rocket Lab is well-equipped to maintain its leadership in the industry.
