Rocket Lab’s second-quarter results gave Bank of America another reason to stay bullish on the space company, even as one part of the business came in lighter than Wall Street expected.
Bank of America reiterated its Buy rating and $115 price objective on Rocket Lab (RKLB) after earnings, analyst Ronald Epstein said in a note given to TheStreet. The target represents roughly 44% upside from the $80.04 share price used in the firm’s Aug. 10 report.
The bank also called potential weakness in Rocket Lab shares following the revenue miss “a particularly attractive entry point,” pointing to strong Space Systems growth, a record backlog and a stronger third-quarter revenue outlook.
Rocket Lab’s launch business weighs on revenue
Rocket Lab reported second-quarter revenue of $234.1 million, up 62% from $144.5 million a year earlier. The result beat BofA’s $228 million estimate, though it came in slightly below the $237 million Bloomberg consensus cited in the bank’s note.
The shortfall was largely tied to Rocket Lab’s Launch Services segment, where revenue fell about 4% from a year ago to $44.6 million. Space Systems moved in the opposite direction, with revenue climbing to $189.5 million from $97.9 million a year earlier, according to the company’s quarterly filing with the Securities and Exchange Commission.
BofA said Space Systems revenue was well ahead of its $165 million estimate, helped by work tied to the Space Development Agency’s Tranche II and III programs and Rocket Lab’s spacecraft components business.
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The bank also pointed to signs that weaker launch revenue may prove temporary. Rocket Lab said it secured more than $437 million in new launch contracts across Electron, HASTE, and Neutron during the quarter and after the period ended, pushing its launch backlog above 90 missions.
Rocket Lab posted a record $2.36 billion total backlog at the end of the quarter, up 137% from a year earlier, according to the company. Its SEC filing showed about 45% of that backlog is expected to be recognized as revenue over the next 12 months.
BofA rounded that figure to roughly 46% in its note, giving the firm another reason to expect continued revenue growth beyond the latest quarter.
The company also narrowed its GAAP net loss to $49.3 million from $66.4 million in the year-ago period. Gross profit rose to $84.6 million from $46.4 million, according to Rocket Lab’s SEC filing.
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Bank of America sees more growth ahead for Rocket Lab
Rocket Lab expects third-quarter revenue between $250 million and $265 million. At the midpoint, BofA said that would represent about 66% year-over-year growth and come in above the $237 million Bloomberg consensus estimate cited by the firm.
The company also expects an adjusted EBITDA loss between $17 million and $23 million in the third quarter. That follows an $8.8 million adjusted EBITDA loss in the second quarter, which BofA said was better than both its $19.3 million loss estimate and the $22.1 million consensus loss cited in the note.
Neutron is another major part of the outlook. Rocket Lab said production of the rocket’s Stage 1 tank remains aligned with delivering the reusable medium-lift vehicle to the launch pad in the fourth quarter of 2026, while first-flight hardware continues through assembly, integration, and testing.
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BofA noted that uncertainty remains around the development timeline, leaving Neutron as one of the biggest variables for investors watching the company’s next phase of growth.
The bank’s $115 price objective is based on a discounted cash flow analysis incorporating base, bull, and bear cases through 2045. BofA identified production delays, setbacks in Neutron development, and difficulties achieving expected acquisition synergies as among the downside risks to its target.
For now, the firm is looking past the softer launch quarter. With Space Systems revenue nearly doubling, backlog at a record and another quarter of rapid growth expected, BofA continues to see upside in Rocket Lab shares after earnings.
Related: Rocket Lab just put its biggest 2026 milestone at risk
