Podcast Summary: The Rundown – Deep Dive: What Rocket Lab Actually Does (And Why It's the Hottest Space Stock)

Host: Zaid Admani
Date: January 24, 2026
Podcast: The Rundown by Public.com

Main Theme

This episode gives listeners a comprehensive deep dive into Rocket Lab, currently the world's second-largest space launch company after SpaceX. Zaid Admani breaks down Rocket Lab’s origins, evolving business model, why it's not yet profitable, its prospects, and key risks, offering both bullish and bearish cases for investors considering the stock amid its surging valuation.

Key Discussion Points & Insights

1. Rocket Lab's Origins and Growth

Founding Story ([00:24]):
- Rocket Lab was founded in Auckland, New Zealand, by Peter Beck—who never attended college, was a self-taught engineer, and started by building rockets in his garage.
Early Milestones ([01:21]):
- 2009: First suborbital rocket (Atea 1) reached space.
- Moved to California, attracted VC funding, and set sights on bigger orbital rockets.
- 2018: Achieved first successful orbital launch with the Electron rocket.

2. Business Model Breakdown

Core Divisions:
- Launch Services ([02:32]):
  - Launching small payloads (e.g., satellites) to space for global customers.
  - 2025 saw a record 21 launches with 100% success rate.
  - Launch Services revenue in Q3 2025: $40.9M (less than 30% of total revenue).
- Space Systems ([03:05]):
  - Designs & manufactures satellites, satellite components, ground stations, and related tech.
  - Majority of company revenue comes from this segment.
  - Vertical integration sets Rocket Lab apart; unlike SpaceX, Rocket Lab builds and launches satellites.
Rocket Comparison ([02:01]):
- Electron: 59 ft tall, 300 kg payload—designed for small satellites.
- Falcon 9 (SpaceX): 22,000 kg payload.

3. Growth Strategies & Product Expansion

Neutron Rocket Development ([04:00]):
- Neutron is a medium-lift rocket, twice Electron's height, capable of carrying 13,000 kg.
- Aims to capture part of the market monopolized by SpaceX’s Falcon 9.
- Potential first launch: Late 2026.

4. The Bull Case

Key Drivers ([05:00]):
- Growing launch cadence and 100% success in 2025 builds credibility.
- Neutron rocket to potentially unlock a larger market.
- Booming demand: Satellites in low Earth orbit projected to rise from 10,000 to 70,000 by 2030 (Goldman Sachs).
- Superior margins in Space Systems (35–40%) due to vertical integration ([06:25]).
- Strategic acquisitions bolster capabilities—recent $1B cash raise for more M&A ([07:00]).
- Government tailwinds:
  - 2025 executive order for deregulation & increased launches (Trump administration).
  - $1.3B Space Development Agency contract for missile-tracking satellites ([07:46]).
  - Growing defense spending and multi-year government contracts enhancing recurring revenue.
- SpaceX IPO hype: Potential public listing at a $1.5T valuation could catalyze interest in all space stocks ([08:38]).
- Wall Street endorsements: Morgan Stanley recently upgraded Rocket Lab with a $105 PT ([09:12]).

5. The Bear Case

Risks & Challenges ([09:40]):
- Fierce competition: SpaceX ("launched Falcon 9 over 600 times with a 99% success rate"), Blue Origin, and rapid cost reductions.
- Development setbacks:
  - Recent failure—Neutron’s stage one tank rupture during pressure testing, possibly causing delays ([10:24]).
- Rocket Lab "continues to burn money" ([11:13]):
  - Neutron development over budget ($250–300M budget, now $360M+ and rising).
  - Profitability remains out of reach.
- Valuation concerns:
  - $47B market cap; 180% stock price increase in a year ([12:02]).
  - 80x price-to-sales ratio, even pricier than private SpaceX (~50x).
- High expectations: Any delays, execution hiccups, or market weakness could trigger a major stock correction.

6. Host's Take & Final Thoughts ([13:40])

"It’s hard not to get excited about space and companies that are working in that industry."
Rocket Lab is one of the few genuinely competitive challengers to SpaceX.
Momentum in launch frequency, vertical integration, and government partnerships are positives.
Caveat: Investment now assumes near-perfect execution—especially with Neutron development. "It’s a high risk, high reward investment but if Rocket Lab pulls this off, the upside is massive."

Notable Quotes & Memorable Moments

On Rocket Lab’s origins:
"Peter was one of those kids that was always building stuff. He built rockets in his garage. He even took apart the family car and then put it back together with a turbocharger on it." (00:35)
On Rocket Lab’s business model:
"SpaceX makes money from launching rockets. Rocket Lab makes money from launching rockets and building the satellites that go on those rockets." (03:29)
On government contracts:
"They recently landed $1.3 billion in contract from the Space Development Agency. These contracts are for building missile tracking satellites that can detect hypersonic threats." (07:46)
About the risks:
"Building rockets is hard." (11:08)
On investing in Rocket Lab:
"If you’re buying the stock today, you’re assuming the company will execute on everything without any setbacks—especially their neutron rocket development. It’s a high risk, high reward investment but if Rocket Lab pulls this off, the upside is massive." (14:30)

Key Timestamps

00:24 – Founder Peter Beck’s background and early years
01:21 – Rocket Lab’s timeline: From first rocket to orbital launches
02:01 – Electron vs. Falcon 9; focusing on small satellites
03:05 – Revenue breakdown: Launch Services vs. Space Systems
04:00 – Neutron rocket plans and market opportunity
05:00 – Bull case factors, satellite boom projections
07:46 – Major government contract win and defense focus
09:12 – Wall Street upgrades and space sector momentum
10:24 – Neutron rocket development setbacks
11:13 – Cash burn and budget overruns
12:02 – Valuation concerns compared to SpaceX
13:40 – Host’s summary, risks, and investor considerations

Closing Thoughts

Zaid Admani delivers a compelling, balanced look at the promise and the perils of Rocket Lab as an investment at the start of 2026. The company's rapid growth, vertical integration, and expanding government ties make it a high-upside play, but execution risk and lofty valuation are significant hurdles.
Final question to listeners: "Do you think the stock is going to the moon or falling back down to earth? ... Will SpaceX just dominate everything?"

For further discussion or feedback, listeners are encouraged to comment on Spotify and YouTube.

Transcript

A (0:00)

Welcome back to the rundown for another weekend deep dive. Today we are talking about Rocket Lab. Rocket Lab is the second largest space launch company in the world behind SpaceX. And 2026 is gearing up to be a very important year for the company. So in today's episode we'll dig into their business model, why they still aren't profitable, and the bull and bear case for the company moving forward. We got a great show for you today. Let's dive in. Now, before we dive into the numbers and business models, let's talk about the origins of Rocket Lab. The company was founded in Auckland, New Jersey by Peter Beck. Now what's interesting is that Peter never went to college, but instead became a self taught engineer. Now, Peter was one of those kids that was always building stuff. He built rockets in his garage. He even took apart the family car and then put it back together with a turbocharger on it. Fast forward to 2006. Peter founded Rocket Lab. Now, his goal was to make smaller dedicated rockets for both scientific and commercial use. And he was able to pull it off just three years later. In 2009, Rocket Lab's Atea 1 suborbital rocket reached space. After that success, the company moved to California. In 2013, they raised a bunch of money from VC investors and got to work on an even bigger rocket. Their next big breakthrough came in 2018. The company successfully launched their first orbital mission with the electron rocket. And it was this breakthrough that would allow the company to launch payloads such as satellites for customers into space. Since the first launch in 2018, Rocket Lab has completed 80 missions with their Electron rocket. In 2025 alone, they launched a record 21 times with a 100% success. That was up from the 16 launches in 2024. Now what makes the electron rocket unique is its size. The electron rocket is tiny compared to SpaceX's Falcon 9. It stands about 59ft tall, roughly the height of a six story building, and can carry only 300 kilograms to low Earth orbit. That's nothing compared to the Falcon 9's 22,000 kilogram payload. And that's exactly the point. Rocket Lab designed electron for smaller satellites. But there's still been a ton of demand for the electron rockets and it's come from all over the world. They're launching for customers across the us, Europe, Japan and Korea. But here's what most people don't realize. It's that Rocket Lab isn't just a launch company anymore. They're a fully vertically integrated space company. So let's talk about their business model. Rocket Lab has two main business lines, their launch services and their space systems. Let's first talk about their launch services. This is the flashy part of their business. It launches things like satellites into space for their customers. Now, you would think that this would be their main revenue driver, but it's not. According to Rocket Labs 2025 Q3 earnings report, Launch Services did $40.9 million in revenue, which was less than 30% of their total revenue. The company makes a majority of their revenue from Space systems. This division designs and manufactures satellites and everything associated with satellites that. So I'm talking about all the satellite components, the ground stations, the solar panels, and all the tech needed to operate the satellites in space. Think of it like this. SpaceX makes money from launching rockets. Rocket Lab makes money from launching rockets and building the satellites that go on those rockets. It's a vertically integrated business model. But the company is still pushing hard to expand their launch business too. Up until this point, Rocket Lab has mostly been using their small electron rocket for launches. But. But they're also actively working on a bigger rocket called Neutron. Neutron is twice the height of electron and it's designed to carry 13,000kg to low Earth orbit. So that's 43 times more payload capacity than the electron rocket. And once the neutron rocket goes into service, that's going to open up a much bigger market for Rocket Lab. And it's one of the many reasons why investors are excited about the company's future. So now let's talk about the bull case for the company. The bull case for Rocket Lab comes down to a few things. Increased launch cadences, vertical integration, M and a opportunities, favorable US policy and the SpaceX IPO. Let's start with the launches. First, as I mentioned earlier, Rocket Lab had a record 21 launches in 2025 with zero failures. So they've built credibility in this space, no pun intended. And they're off to a strong start this year. The company had a successful launch on January 22nd where they deployed satellites for a new customer based in Europe. And then you have the bigger neutron rocket that is around the corner with. With some thinking the company will have its first launch in late 2026. If Neutron succeeds, that unlocks a whole new market for Rocket Lab. See, right now, SpaceX's Falcon 9 basically has a monopoly on medium lift launches. But if Neutron can capture even 10 to 15% of that market, it increases Rocket Lab's revenue potential substantially. This is expected to be a huge opportunity. According to Goldman Sachs, the number of Satellites in low Earth orbit could grow from around 10,000 today to 70,000 by 2030. So all these thousands of satellites need to be launched into space, and Rocket Lab could play a huge role in that. Now, beyond the launches, as I mentioned earlier, the company's main business is their satellite manufacturing. So their business model is vertically integrated, which leads to higher profit margins. Right now, their space system segment has margins ranging from 35 to 40%. And those margins could continue to increase as Rocket Lab continues to vertically integrate the supply chain. In fact, the company is already doing that through acquisitions. They recently acquired Minartic, which is a German company that makes laser communication terminals so multiple satellites can communicate with each other. And that's only the beginning. Rocket Lab CEO Peter Beck says that they plan to buy even more companies. In fact, they recently raised a billion dollars in cash to pursue more deals. Now, the other big tailwind for Rocket Lab is national security. President Trump signed an executive order back in August of 2025 pushing for deregulation and more rocket launches. For Trump is also calling for more defense spending. Now Rocket Lab is starting to dip their toes into government contracts. They recently landed $1.3 billion in contract from the Space Development Agency. These contracts are for building missile tracking satellites that can detect hypersonic threats. The good thing is these are multi year deals that provide stable income and they also build trust with the Department of Defense. As Rocket Lab develops a relationship with the Defense Department, they could win even more defense contracts over some of the old school defense companies like Lockheed Martin. And finally, I have to mention that the hype around the SpaceX IPO could ultimately be a boost for Rocket Lab as well. If SpaceX goes public in late 2026 at a rumored $1.5 trillion valuation, it would validate the entire space sector and could drive more capital into companies like Rocket Lab. As investors search for the next SpaceX, Wall street seems to be catching on. In fact, just this month, Morgan Stanley upgraded Rocket Lab stock with a price target of $105, citing increased launch frequencies and favorable government policy. So that right there is the bull case. But there are some serious challenges and risks facing the company moving forward. So let's talk about the bear case. The bear case for Rocket Lab starts with competition. The space industry has gotten very competitive these days with SpaceX at the top. But there's also Jeff Bezos, Blue Origins. And the thing is, these companies aren't standing still. They're launching constantly. They're driving down costs and expanding their capabilities. And the head start from a Company like Space X could be too much to overcome. For example, SpaceX has launched the Falcon 9 rocket over 600 times with a 99% success rate, while Rocket Lab is still developing their comparable neutron rocket. In fact, Rocket Lab recently announced a setback in development. On January 21, Rocket Lab said that one of Neutron's state stage one tanks rupture during a hydrostatic pressure test. The company says there was no major damage and the next tank is already in production. But this is exactly the kind of setback that can lead to months of delays. Simply put, building rockets is hard. And that brings me to the next reason to be bearish. Rocket Lab continues to burn money. In fact, they're still not profitable. The company is burning cash developing their neutron rocket. They originally budgeted 250 to 300 million dollars for the program. That number is now up to 360 million dollars and and climbing. And with every delay like they just had, that'll just add to the cost. Then you add in the fact that Rocket Lab's valuation is already frothy. At the time of this recording, Rocket Lab is trading at a $47 billion valuation thanks to a 180% jump in their stock price over the last 12 months. So that means the company is trading at 80 time price to sales when looking back at the last 12 months in revenue. Now comparing this to SpaceX is a little difficult because SpaceX is a private company, so the data isn't publicly available. But based on some reports of revenues and valuation, SpaceX is trad at approximately 50 times their revenue. So Rocket Lab is more expensive when compared to SpaceX, at least when you compare it to the price to sales ratio. So essentially, Rocket Lab is priced for near perfect execution. They need the neutron rocket to pay off. They need to continue vertically integrating. And if there's any stumble like more delays or a failed launch or weaker than expected demand, that could trigger a serious correction in the stock price. So what's my take here? You know, I'll be honest with you. It's hard not to get excited about space and companies that are working in that industry. You know, I think that Rocket Lab is one of the few space these companies that could be a legit competitor to SpaceX in the long term. They have a lot of momentum right now with their electron rocket and they continue to vertically integrate their business with their satellite manufacturing. And they have a huge tailwind for more defense spending in the us but if you're buying the stock today, you're assuming the company will execute on everything without any setbacks especially their neutron rocket development. It's a high risk, high reward investment but if Rocket Lab pulls this off the upside is massive. Well all right guys, hope you enjoyed that weekend deep dive. Let me know in the comments on Spotify and YouTube what you think about Rocket Lab. Do you think the stock is going to the moon or falling back down to earth? Are like are they really going to be a legit competitor to SpaceX or will SpaceX just dominate everything? We'd love to hear your thoughts in the comments. And while you're at it consider giving us a five star rating on Apple, Spotify or wherever you listen to your podcast. You know all that engagement really does help us out. It helps other people find the show. Thank you guys again for listening, watching and commenting. Shout out to Mike and Connor for all the work behind the scenes and we'll see you guys back here tomorrow.