Rocket Lab's 38% Correction: Record $2.2B Backlog Meets SpaceX Gravity

Rocket Lab shares crashed 38% in a four-week selloff triggered by profit-taking and SpaceX's IPO, yet Q1 2026 revenue hit a record $200M and Neutron rocket nears first flight.

Shares of Rocket Lab have been hammered in a brutal four-week selloff that wiped nearly 38% from the stock's value, dragging the price to around €83.60. That's a world away from the 52-week high of €133.80 hit earlier this year. The rout has been fueled by a one-two punch of a classic "sell-the-news" event and the gravitational pull of SpaceX's long-awaited public listing.

The Nasdaq-100 inclusion on June 22 was supposed to be a landmark moment — Rocket Lab became the first pure-play space company to join the index. But as is often the case, the run-up had already been priced in. On the first day of inclusion, shares opened more than 8% lower as investors took profits. The disappointment was compounded by the debut of SpaceX on June 12. The heavyweight's IPO caused an immediate rotation out of smaller names; Rocket Lab lost nearly 11% that day alone, and SpaceX itself shed around 16% in its first three trading sessions, pulling the entire sector lower.

Yet behind the price chart, the business is firing on all cylinders. First-quarter 2026 revenue hit a record $200.3 million, a 63.5% jump year-over-year, and gross margins touched all-time highs of 38.2% GAAP and 43% non-GAAP. The backlog has ballooned to $2.2 billion, buoyed by a $816 million U.S. Space Force satellite contract, a $190 million hypersonic launch deal covering 20 missions, and a $90 million GEO surveillance order. Management expects second-quarter revenue of between $225 million and $240 million — another record.

Operational tempo is accelerating. Rocket Lab is prepping its 90th Electron launch. The recent Victus-Haze mission for the Space Force demonstrated remarkable agility: the launch order-to-orbit timeline was just 16 hours and 42 minutes, and the Pioneer satellite was declared operational in 37 hours and 36 minutes — well inside the 72-hour deadline. Such performance underscores the company's growing credibility in defense and responsive space.

All eyes are now on the Neutron rocket, a medium-lift vehicle that represents the next growth chapter. At 43 meters tall, capable of lifting 13,000 kilograms to low Earth orbit, and powered by nine Archimedes engines burning liquid oxygen and methane, Neutron is designed to compete directly with SpaceX's Falcon 9. Rocket Lab has applied for FAA launch approval within a window from July 1 to December 31, 2026. But the schedule has already slipped once, after a fuel-tank pressure test failed in January. The flawed tank is being replaced with one built on an automated fiber-winding machine to avoid manual lamination errors. First flight is now targeted for the fourth quarter of 2026.

The stakes are high. Rocket Lab has already sold a block booking of five Neutron launches — its largest single deal ever. Analysts estimate that under a 20-launch-per-year scenario, Neutron could generate between $1 billion and $1.1 billion annually. But the stock's valuation already prices in that success: the price-to-sales ratio hovers around 100x, a discount to SpaceX's 130x but still hefty.

The shareholder picture is mixed. Arjun Kampani, the general counsel, sold about $9.5 million worth of stock on June 18, part of a three-month insider selling total that exceeded $24 million. The share count has risen 25% over the past year, a meaningful dilution for existing holders. On the other hand, HSBC boosted its stake by 613.9% in the fourth quarter, now holding 1.57 million shares. Institutions collectively own 71.78% of outstanding shares.

Wall Street remains broadly constructive: 50% of 16 analysts rate the stock a strong buy and 31% a buy. KeyBanc's Michael Leshock upgraded the shares to "Buy" on June 15 with a $135 price target, arguing the market overreacted to the SpaceX IPO and that the correction created an entry point. The stock now trades roughly 9% below its 50-day moving average of €92.48, with an RSI of 40.4 and annualized volatility near 93%.

For Rocket Lab, the path forward hinges on Neutron. If the rocket flies on schedule, the current weakness may prove to be a buying opportunity. If delays mount, the shares could face further pressure. The next major catalyst will be second-quarter earnings in August, followed by the Neutron debut — a make-or-break moment for a company that has already proven it can execute in small launch but now needs to prove it can scale.