On Friday, Rocket Lab's share price experienced another significant surge.
Rocket Lab (RKLB up 2.19%) continues to soar in the stock market. The small space launch company saw a 3.8% increase in shares before 11:25 a.m. ET on Friday.
The cause for this positive trend can be attributed to the bullish analysts at Roth MKM. This morning, they upgraded their price target for Rocket Lab, a company currently trading at around $23.00 per share, to a potential rise of 29%, targeting $30.00 per share within the next year.
Here's why Roth is optimistic about Rocket Lab. Much like investment powerhouses Morgan Stanley and Citigroup, Roth sees the Neutron medium-lift vehicle as the main driver for Rocket Lab's growth. Both Morgan Stanley and Citigroup boosted their price targets for Rocket Lab earlier this week, sharing Roth's enthusiasm for Neutron.
Roth's analysis doesn't bring any groundbreaking news, instead focusing on what's already been shared: Rocket Lab intends to conduct a test flight in 2025, with at least one customer signed on for two flights if the test is successful. The analyst also speculates that Rocket Lab could see strong demand for Neutron if it performs as well as its current Electron series of rockets.
Is Rocket Lab stock worth investing in?
What sets Roth MKM apart from other analysts is their higher confidence in Rocket Lab's market valuation. While Morgan Stanley values Rocket Lab stock at $18.00 per share and Citigroup at $22.00, Roth has the highest price target on Wall Street, at $30.00 per share – a figure matched by Bank of America as well.
However, as a cautious investor, I must admit that I'm skeptical of the $30.00 per share valuation. With the current stock price already valued at 30 times its trailing sales, a further 29% increase would drive the price up to more than 39x sales. Though this space stock has tremendous potential, I believe the price should be more balanced to avoid a potential bubble.
In light of Roth MKM's optimism, investors looking to diversify their finance portfolio might consider investing in Rocket Lab's promising future. The analyst's high price target of $30.00 per share is based on their belief in Rocket Lab's Neutron medium-lift vehicle, a key growth driver equally recognized by Morgan Stanley and Citigroup.
