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If you are looking at Rocket Lab and wondering whether the current share price really lines up with its underlying worth, this article is going to walk through that question in a clear, valuation focused way.
The stock last closed at US$72.03, and while returns over the past week, month and year have been mixed at 11.4% decline over 7 days, 15.1% decline over 30 days and 155.2% gain over 1 year, the very large 3 year return suggests the story has changed a lot for longer term holders.
Recent news around Rocket Lab has kept attention on how the company is progressing in the space sector, including ongoing development of its launch services and spacecraft offerings, as well as its position in broader conversations about commercial space access. This context helps explain why the share price has seen both sharp pullbacks in the short term and very strong gains over multi year periods.
Simply Wall St currently gives Rocket Lab a value score of 1 out of 6, which means it screens as undervalued on only one of six checks. Next, we will walk through the different valuation methods behind that score and then finish with a way to look at valuation that goes beyond just the headline numbers.
Rocket Lab scores just 1/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.
A DCF model takes estimates of a company’s future cash flows, then discounts them back to today to arrive at an implied value per share. It is essentially asking what all those future cash flows are worth in today’s dollars.
For Rocket Lab, Simply Wall St uses a 2 Stage Free Cash Flow to Equity model. It starts from last twelve months free cash flow of a loss of $220.28 million. Analyst forecasts and extrapolations then step this forward, with projected free cash flow of $1,062 million in 2030, and further estimates extending out to 2035. These later years are extrapolated by Simply Wall St once analyst coverage runs out.
Putting all those projected cash flows together and discounting them back, the model arrives at an estimated intrinsic value of US$77.43 per share. With the latest share price at US$72.03, the DCF suggests the stock trades at around a 7.0% discount to this estimate, which is a relatively small gap.
Result: ABOUT RIGHT
Rocket Lab is fairly valued according to our Discounted Cash Flow (DCF), but this can change at a moment’s notice. Track the value in your watchlist or portfolio and be alerted on when to act.
RKLB Discounted Cash Flow as at Feb 2026
For companies that are not yet generating consistent profits, P/B can be a useful way to think about value because it compares what you pay per share with the accounting value of the net assets behind that share.
In general, the “right” P/B multiple tends to be higher when investors expect stronger growth and are comfortable with higher risk, and lower when expectations are more modest or uncertainty is higher. The context around the business therefore really matters.
Rocket Lab currently trades on a P/B of 30.04x. That is well above the Aerospace & Defense industry average P/B of 4.15x and also above the peer average of 10.16x that Simply Wall St uses for this stock. To go a step further, Simply Wall St also calculates a proprietary “Fair Ratio”, which is the P/B multiple it would expect for Rocket Lab after factoring in earnings growth estimates, profit margins, industry, market cap and specific risks.
This Fair Ratio approach can be more tailored than a simple peer or industry comparison because it adjusts for the company’s own profile rather than assuming all businesses deserve similar multiples.
Result: OVERVALUED
NasdaqCM:RKLB P/B Ratio as at Feb 2026
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Earlier we mentioned that there is an even better way to understand valuation. Let us introduce you to Narratives, which are simply your own story about a company that links what you think Rocket Lab can do in terms of future revenue, earnings and margins to a financial forecast, a fair value, and then a clear comparison against today’s share price. All of this is available within an easy tool on Simply Wall St’s Community page that updates automatically as new news or earnings arrive and lets different investors anchor very different views, such as one user seeing fair value around US$47 and another closer to US$120, to their own buy or sell decisions.
For Rocket Lab however we’ll make it really easy for you with previews of two leading Rocket Lab Narratives:
🐂 Rocket Lab Bull Case
Fair value in this user narrative: US$97.83 per share
Implied pricing vs that fair value: around 26% below the narrative fair value at the last close of US$72.03
Revenue growth assumption in the narrative: 55%
Sees Rocket Lab building a vertically integrated position across launch and space systems to capture a meaningful share of the broader space economy.
Frames the Neutron rocket as the key turning point for reaching larger revenue, improving net margins and moving away from funding growth through shareholder capital.
Highlights execution risks around Neutron, capital management and competition, while arguing that disciplined cost focus and a different approach to SpaceX could still support a large long term role for Rocket Lab.
🐻 Rocket Lab Bear Case
Fair value in this analyst style narrative: US$68.75 per share
Implied pricing vs that fair value: around 5% above the narrative fair value at the last close of US$72.03
Revenue growth assumption in the narrative: 36.36%
Emphasises that Neutron spending, high R&D and capital intensity could keep free cash flow under pressure even if launch activity and contract wins remain strong.
Points to reliance on large government and commercial programs, competition from SpaceX and others, and integration risks from acquisitions as potential sources of earnings volatility.
Notes that to support higher price targets, the company would need to reach specific revenue and earnings levels and trade on a high future P/E multiple, which some investors may view as demanding.
Taken together, these two narratives provide a clear range of views on what needs to go right, what could go wrong, and how that lines up with Rocket Lab’s current share price, so you can decide which story, if either, fits your own expectations.
Do you think there’s more to the story for Rocket Lab? Head over to our Community to see what others are saying!
NasdaqCM:RKLB 1-Year Stock Price Chart
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include RKLB.
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