SpaceX's recent IPO has undoubtedly captured the spotlight, but in the grand scheme of the space industry, it's just one of many players. While it's easy to get caught up in the hype, I believe that Rocket Lab (RKLB) is a company that investors should take a closer look at. Despite SpaceX's dominance in the headlines, Rocket Lab's strong business momentum, expanding capabilities, and strategic acquisitions make it a compelling investment opportunity. However, investors should also be aware of the risks associated with the company's customer concentration and government exposure.
One of the key reasons why Rocket Lab stands out is its solid business momentum. In the first quarter, the company demonstrated impressive growth, with revenue jumping 63.5% year over year to $200.3 million. This growth is not just a one-time spike, as Rocket Lab expects second-quarter revenue to fall in the range of $225 million to $240 million, up 16% sequentially at the midpoint. The company's gross margin was also strong, at 38.2%, while backlog rose 20.2% sequentially to $2.2 billion. These numbers are a testament to Rocket Lab's ability to execute and deliver on its promises.
Another reason why Rocket Lab is worth considering is its expanding capabilities. The company is not just a launch provider; it's also building a defense-focused business. In March 2026, Rocket Lab signed a $190 million HASTE contract with Kratos Defense & Security Solutions for the U.S. Department of Defense's MACH-TB 2.0 hypersonic testing program. This contract covers 20 hypersonic test flights over four years and is the largest launch contract in the company's history. Additionally, Rocket Lab is developing the Neutron rocket, which is important to the company's ambition to handle larger satellites, government missions, and larger commercial missions.
One of the most exciting aspects of Rocket Lab is its planned $8 billion acquisition of Iridium Communications (IRDM). If the deal closes, Rocket Lab would not only build and launch satellites but also operate them. It could also operate a satellite network and sell communication services. This acquisition would give Rocket Lab a significant presence in the satellite market and provide a long-term catalyst for growth. However, investors should be aware of the risks associated with the acquisition, such as the potential for integration challenges and the need for significant capital investment.
While SpaceX's IPO has undoubtedly brought more attention to the space industry, Rocket Lab's case is not based only on market excitement. The company's strong business momentum, expanding capabilities, and strategic acquisitions make it a compelling investment opportunity. However, investors should also be aware of the risks associated with the company's customer concentration and government exposure. In my opinion, Rocket Lab is a company that investors should take a closer look at, as it has the potential to be a significant player in the space industry in the years to come.
