QS Research · Michael Burry's Scion Capital analyst template · 2006
Rocket Lab Corp (RKLB)
As of 2026-11-06 · 12/15 boxes filled from SEC filings and market data
Conclusion: SHORT
Conviction high · base case -69% · downside -77% · upside -57%
The market is still capitalizing TTM revenue at 38.31x EV/sales (N22) on a $29.47B enterprise value (N21) for a business with TTM EBIT of -$223.5M (N11) and free cash flow of -$371.1M (N16). I use section 13's TTM revenue base of $769.1M (N9), not a normalized earnings base, because there is no positive earnings cycle to normalize: TTM EBIT is negative and FY2025 operating income was -$228.8M. At 10x EV/sales, $769.1M x 10 = $7.691B EV + $2.19B net cash = $9.881B / 598.35M shares (N5) = $16.51 (-68.9%); at 6.76x = $12.35 (-76.7%); at 15x = $22.94 (-56.8%). Even the 15x upside case is far below today's $53.07 (N1), so this is a short, not a watch. The $2.19B net cash and $2.36B backlog are real offsets, but they do not bridge a 38.31x sales multiple to comps when Neutron has slipped to 2027 and the P&L remains loss-making.
Key numbers
- Share price: $53.07
- Market cap: $31.75B
- Latest financial period: TTM to Jun 30, 2026
- Revenue (TTM): $769.1M
- Price / book: 9.09x
The 15 boxes
- ✓ 1. Long-form business notes
Rocket Lab's FY2025 10-K describes an end-to-end space company earning revenue from Launch Services (Electron and HASTE, with Neutron in development) and Space Systems (spacecraft components, design/manufacturing, optical systems and on-orbit management). FY2025 revenue was $601.8M and gross profit $207.2M, but operating income was -$228.8M, net income -$198.2M, operating cash flow -$165.5M and capex $156.3M; cash was $828.7M. The oldest annual report supplied (FY2020) is a blank-check/SPAC document, so the source set shows a change from pre-combination shell disclosure to an operating space company, not a like-for-like operating history.
- ✓ 2. Competitive advantage
Rocket Lab competes in four crowded categories against far larger players (SpaceX, Northrop Grumman, ULA, Lockheed, Boeing, Airbus, Blue Origin, Firefly) and states only that it 'compete[s] favorably' on flight heritage, schedule, customization, features, price and customer experience — asserted, not quantified. The only hard evidence of advantage is at the gross line: gross profit went from -$11.8M in FY2020 to $207.2M in FY2025, but operating income was still -$228.8M in FY2025 and operating cash flow -$165.5M, so nothing yet shows the advantage earns a return. Customer concentration (top five = 49% of FY2025 revenue, 47% from U.S. government) and fixed-price contracts further limit pricing power.
- ✓ 3. 10-Q takeaways
Q2 2026 (quarter ended 2026-06-30) revenue was $234.1 million, up 62% year over year, with space systems $189.5 million (+94%) carrying all the growth while launch services slipped 4% to $44.6 million on revenue-recognition timing. Gross margin improved to 36.1% from 32.1%, but the company remained deeply loss-making on operations: operating loss $(57.5) million in Q2 2026 versus $(59.6) million a year earlier, with R&D $82.4 million and SG&A $59.7 million together exceeding gross profit; the narrower net loss of $(49.3) million was helped by $16.5 million of interest income, not by operations. The balance sheet is heavy with cash ($2.1 billion cash plus $258.1 million marketable securities at 2026-06-30) but committed to the pending Iridium deal (enterprise value ~$8.0 billion, $3.6 billion bridge commitment). Backlog rose to $2,355.9 million at 2026-06-30 from $1,847.3 million at 2025-12-31, and Neutron's first launch is still targeted at Q4 2026 with the window described as narrowing.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ○ 11. Impression of the shareholder letter
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
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