Thoughts on Rocket Lab Corp (RKLB US) please
Hi James, Do you think that RKLB:US could benefit from the disharmony between Trump and Musk. Will we see more government contracts being diverted to them? Nick.
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Hi Nick,
For subscribers not familiar with Rocket Lab Corp (RKLB US) its a $US12.5bn California based aerospace company specialising in end-to-end space services, including satellite launches, spacecraft manufacturing, and satellite components. The companies $US435mn revenue in FY24m was split ~70% Space System and 30% Launch Service. As you alluded to Elon Musk’s companies, in particularly SpaceX, compete with Rocket Lab in several key areas, although their focus, scale, and capabilities differ.
- The Launch Services segment, which includes the deployment of satellites into orbit, directly competes with SpaceX’s Falcon 9 and Falcon Heavy rockets.
- The Space Systems segment, which encompasses satellite design, manufacturing, and related services, overlaps in part with SpaceX’s Starlink and Starshield programs, the direct competition is less pronounced.
Hence at this stage Elon Musk’s “falling out” with President Trump primarily overlaps with RKLB smaller launch services division although 30% of revenue is not to be ignored. However, Rocket Lab’s growing involvement in U.S. defense and national security space initiatives, could be a major beneficiary if more dominant player SpaceX falls out of favour:
- In the last 2-years Rocket Lab has secured ~$US560mn of government contracts.
- In comparison SpaceX has already secured ~$US8.4bn of government contracts.
While its hard to know where the Trump-Musk relationship will go, any animosity is a bonus to RKLB. While RKLB is not yet profitable having lost ~$US60.6mn in Q1 2025, revenue is growing fast, and we think the stock looks interesting ~$US27 with uncertainty around SpaceX an added bonus.
