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?"

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