Rocket Lab Corporation (NASDAQ:RKLB) received a Buy rating from Citi one day after landing its largest Electron contract ever. Citi analyst John Godyn described the stock as a “core holding for space bulls, and assigned a $105 price target. The shares gained 4.7% in premarket trading on October 1. Rocket Lab ranks No. 2 among Insider Monkey’s 10 best SPAC’s to invest in. But this stock holds the top spot on the list.
Why This Backlog Matters?
The agreement is with Synspective, a Japanese radar-imaging company, which will have 20 of its StriX satellites launched by Rocket Lab between 2028 and 2031. The deal’s financial terms were not revealed. With the agreement, Synspective now has 47 Electron missions booked, more than any other customer. The company’s total backlog has grown to more than 100 missions.
For investors, the deal provides visibility into launch activity for years ahead. At the same time, it underscores ongoing demand for small-satellite launches as Rocket Lab spends heavily on developing Neutron, its larger reusable rocket. Citi also points to the company’s broader business, noting that it generates revenue from spacecraft components and technology in addition to launches. RKLB isn’t the only stock with moonshot potential. Reddit investors are also betting on these names.
Is the Premium Justified?
Rocket Lab’s valuation is far from cheap. Because current earnings are too weak for a meaningful forward P/E comparison, the forward price-to-sales ratio is more useful. The stock trades at 43.51x forward sales, roughly 50% above its recent historical average of 28.96x. Even based on 2029 earnings estimates, the P/E stands at 108.88x.
So what supports that premium? Analysts forecast earnings growth of around 76% this year and 71% in 2029, while Rocket Lab holds $2.3 billion in cash against only $133.69 million of debt. The backlog and cash position support some valuation premium, in my view, but the stock already prices in strong execution. Higher-than-expected Neutron spending or weaker launch margins could challenge that view.
According to our database, hedge fund ownership of Rocket Lab increased from 43 funds at the end of Q1 2026 to 52 funds at the end of Q2 2026. However, short interest remained elevated at 7.31% of float as of September 15, 2026. The combination suggests that institutional interest is growing, even as some investors are betting against the stock.
The growing backlog, Citi’s support, and higher hedge fund participation all reinforce the growth story. However, the stock’s valuation leaves little room for execution mistakes.
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