Rocket Lab’s stock could surge 250% as the company takes a page out of SpaceX’s book, analyst says

Morgan Stanley has issued a highly bullish outlook on Rocket Lab (RKLB), suggesting its stock could climb by as much as 250%. The core of this optimistic revision stems from Rocket Lab's strategic pivot to diversify its business, moving beyond its foundational rocket launch services.

Historically known for its Electron rocket, RKLB is increasingly focusing on its space systems division, which includes satellite manufacturing, components, and on-orbit services. This expansion aligns the company more closely with the integrated approach seen in industry leader SpaceX, which combines launch capabilities with satellite constellations and other space technologies. For RKLB, this means a more resilient revenue stream, less dependence on the cyclicality of launch contracts, and higher-margin opportunities in the rapidly expanding space economy.

The analyst's revised valuation reflects the growing contribution of the space systems segment to RKLB's overall revenue and profitability profile. While the company currently reports negative net margins and diluted EPS, the long-term potential for these diversified segments to drive growth is seen as substantial. The market will be watching for tangible evidence of this diversification translating into improved financial performance and a clearer path to profitability in upcoming earnings reports.