Rocket Lab stock price crash is gaining steam: how low can it go?

Rocket Lab’s stock price plunged more than 12% on July 16, hitting its lowest level since April 13. The decline has pushed the shares down 55% from their peak this year, wiping out nearly half of the company’s market value as its valuation fell from $86 billion to around $40 billion. 

Despite the sharp sell-off, most analysts covering the company remain bullish, with many expecting the stock to recover as growth catalysts emerge.

Analysts see Rocket Lab stock rebound

RKLB stock has plunged in the past few weeks, mirroring the performance of most companies in the space industry. SpaceX, the biggest firm in the world, dropped to its IPO price this week, wiping out over $1 trillion in value.

Planet Labs has plunged to $22, down from the year-to-date high of $51, while Virgin Galactic has dived from $9 in June to $2.60 today. The popular Procure Space ETF (UFO) dived to $43 from the year-to-date high of $68.

These losses are happening as investors book profits following the strong gains they experienced before SpaceX went public. At its peak this year, UFO ETF was up by 360% from its lowest level in 2024. 

Therefore, investors are simply selling the SpaceX IPO news, which has been made worse by its performance.

Still, despite this retreat, analysts are bullish on the company, pointing to its strong performance and its growing market share in the space industry. Morgan Stanley reiterated its overweight rating, while Citigroup reiterated its outperform position. 

Bank of America, on the other hand, boosted the target from $105 to $110, while Citizens and Roth have a target of $130. All these targets are significantly higher than where it is today.

READ MORE: Rocket Lab stock jumps as KeyBanc upgrade revives space sector

Rocket Lab has potential catalysts 

RKLB stock has some potential catalysts in the coming months. First, its revenue growth continues this year. It made $200.3 million last quarter, up by 63% from the same period last year. Its backlog jumped by 20% to $2.2 billion, with its Electron, HASTE, and Neutron orders continuing to grow. It achieved five dedicated Neutron flights during the quarter.

The company also recently announced that it would spend $8 billion acquiring Iridium. It hopes that it will make it a vertically integrated company, with Rocket Lab designing satellites, manufacturing spacecraft components, and launching rockets. 

Iridium, on the other hand, owns a global satellite communications network. As such, it hopes that this model will help it compete further with SpaceX’s Starlink project. Additionally, Iridium will bring recurring and high-margin revenue and its globally coordinated L-band spectrum. 

Analysts suspect that the company’s business to continue growing this year. The average estimate is that its revenue will jump by 52% to $919 million, with the figure reaching $1.28 billion next year.

RKLB stock technical analysis

Rocket Lab stock chart | Source: TradingView

The weekly chart shows that the RKLB stock has plunged in the past few weeks, moving from a record high of $151 to the current $67. It has just crashed below the 50% Fibonacci Retracement level, and is slowly approaching the 61.8% retracement point, where rebounds normally happens.

The stock has just dropped below 50-week moving average, while the Relative Strength Index has moved below the neutral level of 50. Therefore, the stock will likely drop further, potentially to $60 or $50, and then bounce back, potentially when it releases its financial results.