Rocket Lab Secures Landmark Defense Contract Amid Flawless Launch Record

Rocket Lab USA US7731221062

A monumental defense contract has provided a powerful year-end boost for Rocket Lab USA, propelling its shares upward. The company's operational performance, marked by an unblemished launch history, further strengthens its position. The central question for investors is whether the current Wall Street rally accurately reflects the value of its now-bulging order book.

The company concluded its launch schedule for the year with the successful "Wisdom God Guides" mission for Japan's iQPS, deploying the QPS-SAR-15 satellite into orbit. This mission maintained a perfect operational record: 21 Electron launches in 2025, all of them successful. Chief Executive Sir Peter Beck emphasizes this 100% reliability rate as a key competitive differentiator against other U.S. launch providers. Furthermore, five additional launches for the same Japanese client are firmly scheduled from 2026 onward.

Financially, recent quarterly results have bolstered confidence. Revenue reached $155 million, a figure that exceeded analyst forecasts and represents a 48% increase compared to the same period last year. The company reported a loss per share of $0.03, which was narrower than the consensus estimate of a $0.05 loss.

A Billion-Dollar Defense Mandate

The most significant catalyst is a new, record-setting agreement with the U.S. Space Development Agency (SDA). Valued at $816 million in total, it stands as the single largest contract in Rocket Lab's history. The award includes a $806 million base for the construction of 18 satellites designed for missile warning and tracking, plus options worth an additional $10 million.

These spacecraft will form part of the SDA's "Tracking Layer Tranche 3" program and will be equipped with advanced infrared and protective sensors. This new deal expands upon a prior $515 million contract with the agency. Collectively, these awards are pushing the company's total backlog—including subsystems—toward the $1 billion threshold.

Analyst Sentiment and the Road Ahead

Wall Street's response has been predominantly positive. Among 13 analysts covering the stock, nine currently recommend buying, with none issuing sell ratings. Research firm Robert W. Baird recently initiated coverage with an "Outperform" rating and set a price target of $83.00. Needham & Company has also reaffirmed its buy recommendation.

With a solid cash position and this major new contract in hand, market attention is shifting to the first half of 2026. This period is slated for the long-awaited maiden flight of Rocket Lab's new, reusable Neutron rocket, a project that has experienced delays. The success of the Neutron is viewed as critical for the company to establish itself as a durable market alternative to SpaceX's Falcon 9 and capture meaningful market share.