Rocket Lab (RKLB) stock has rallied 172% year-to-date, reflecting investors’ optimism about the space tech company’s growth prospects. On Wednesday, top Baird analyst Peter Arment initiated a Buy rating on RKLB stock. Arment assigned a Street-high price target of $83, which indicates 20% upside potential from current levels.
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While many analysts are bullish on Rocket Lab stock, ace investor Cathie Wood offloaded 53,917 shares of the provider of small satellite launch services and advanced spacecraft components via the ARK Space Exploration & Innovation ETF (ARKX) on Tuesday.
Top Baird Analyst Is Bullish on Rocket Lab Stock
Arment believes that Rocket Lab’s position as a reliable space launch provider is “firmly established” through its 94% mission success rate. The 5-star analyst expects the Street’s 34% compound annual growth rate (CAGR) estimate in Rocket Lab’s revenue through 2030 to be driven by the company’s larger Neutron rocket.
In fact, Arment expects Neutron to enable Rocket Lab to enter the highly compelling medium-lift market as a direct competitor to SpaceX’s (PC:SPXEX) Falcon 9 rocket.
It is worth noting that Arment’s $83 price target is based on a valuation multiple of 30x his 2030 revenue estimate. The analyst believes that Rocket Lab has the growth potential to become a “$200+ stock” if it achieves a solid launch cadence growth, coupled with the development of reusable rocket technology.
Rocket Lab continues to gain confidence among investors with its frequent launches and a growing number of strategic contracts. Moreover, the company’s expanding capabilities are driving demand for its rockets in both U.S. defense and commercial end markets.
Is RKLB Stock a Good Buy?
Currently, Wall Street has a Moderate Buy consensus rating on Rocket Lab stock based on nine Buys and five Hold recommendations. The average RKLB stock price target of $56.42 indicates 18.6% downside risk from current levels.
