Citizens analyst Trevor Walsh reiterated the Market Perform rating on Rocket Lab USA, Inc. RKLB on Friday.
On Thursday, the company reported financial results for the first quarter, with revenues of $122.57 million, beating the consensus estimate of $121.38 million. The company reported a first-quarter loss of 12 cents per share, beating analyst estimates for a loss of 13 cents per share.
Walsh noted that while quarterly losses narrowed sequentially by $6.8 million, the reported figure came in ahead of the consensus estimate, driven by two main factors.
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First, a decline in revenue per launch to $7.1 million from $8.2 million in F1Q24 resulted in reduced launch services income.
At the same time, research and development expenses increased as the company scaled manufacturing and production capacity in preparation for the Neutron rocket launch.
On pricing, Walsh said the company is intentionally offering volume-based discounts to secure long-term launch contracts, leading to a lower average selling price in the quarter.
However, he added that the backlog for the second half of 2025 points to an uptick in launch frequency and ASPs, driven by higher-value HASTE and mission assurance launches.
As a further boost to Neutron’s commercial traction, Walsh highlighted a new agreement with the U.S. Air Force Research Laboratory for a rocket cargo mission, which, according to Founder and CEO Sir Peter Beck, reflects growing Department of Defense confidence in Neutron’s capabilities.
Analyst Walsh raised the firm’s fiscal 2025 non-GAAP EPS estimate to ($0.20), up from the previous projection of ($0.24) and above the consensus expectation of ($0.25), citing anticipated revenue growth of 33% for the year.
For fiscal 2026, Walsh maintained the non-GAAP EPS estimate at $0.02, which remains slightly ahead of the Street’s forecast of $0.01, driven by expected revenue growth of 50%.
Price Action: RKLB shares are trading lower by 9.9% to $20.80 at last check Friday.
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