If you are wondering whether Rocket Lab’s soaring story still has room to run, you are not alone. This article is going to unpack what the current share price is really implying.
The stock has rocketed higher, with gains of 7.4% over the last week, 21.6% over the last month, 121.9% year to date, 113.8% over the past year, and an eye catching 1320.1% over three years. This naturally raises questions about both upside and downside from here.
Recently, the market has been reacting to a stream of news around Rocket Lab’s growing launch cadence and expanding space systems business, including new contracts and mission wins that reinforce its role as a key small launch provider. At the same time, broader enthusiasm for space infrastructure and defense related opportunities has added fuel to the move by shifting how investors think about the company’s long term addressable market.
Despite all that excitement, Rocket Lab currently scores just 0/6 on our valuation checks. This means we will need to dig into DCFs, multiples, and comparables to see what is really priced in, before finishing with a more nuanced way to judge whether the stock’s valuation truly fits the story.
Rocket Lab scores just 0/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.
A Discounted Cash Flow, or DCF, model estimates what a company is worth today by projecting its future cash flows and then discounting them back into today’s dollars.
For Rocket Lab, the model used is a 2 Stage Free Cash Flow to Equity approach. The company is currently burning cash, with last twelve month Free Cash Flow of about $220.3 Million in the red. Analysts and extrapolated estimates see this flipping meaningfully over time, with projected Free Cash Flow rising to around $1.34 Billion by 2035 in $. These projections combine a handful of analyst forecasts through 2029, then apply tapering growth assumptions beyond that supplied by Simply Wall St.
When those future cash flows are discounted back to today, the DCF model arrives at an intrinsic value estimate of about $37.65 per share. On Simply Wall St’s numbers, this implies Rocket Lab is roughly 47.1% overvalued relative to its current share price, indicating that a lot of future success is already priced in.
Result: OVERVALUED
Our Discounted Cash Flow (DCF) analysis suggests Rocket Lab may be overvalued by 47.1%. Discover 908 undervalued stocks or create your own screener to find better value opportunities.
RKLB Discounted Cash Flow as at Dec 2025
Story continues
For asset-heavy, still unprofitable businesses like Rocket Lab, the price to book, or P B, ratio is often more informative than earnings-based metrics because it compares the market value directly to the net assets that have been built up on the balance sheet.
In theory, faster growth and lower risk justify a higher normal multiple, while slower growth or higher uncertainty should pull that multiple down. Rocket Lab currently trades at about 23.1x book value, far above the Aerospace and Defense industry average of around 3.6x and even well ahead of its peer group, which sits closer to 8.9x. That spread signals investors are already paying a substantial premium for its future potential.
Simply Wall St’s Fair Ratio is designed to move beyond blunt peer comparisons by estimating what a reasonable P B multiple should be once you factor in Rocket Lab’s growth runway, profitability profile, risk, industry positioning, and market cap. With no Fair Ratio available here, the gap cannot be precisely quantified, but the extreme premium to both peers and the sector suggests the current P B multiple is rich for the risk profile.
Result: OVERVALUED
NasdaqCM:RKLB PB Ratio as at Dec 2025
PB ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1447 companies where insiders are betting big on explosive growth.
Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, a simple way to connect your view of Rocket Lab’s story with concrete forecasts and a fair value estimate. A Narrative on Simply Wall St is your story behind the numbers, where you plug in what you believe about future revenue, earnings and margins, and the platform turns that into a financial forecast and a Fair Value that you can compare to today’s share price to help inform whether you want to buy, hold or sell. Narratives live on the Community page, are easy to set up, and are used by millions of investors. They update dynamically whenever new information, such as news or earnings, comes in, so your view stays current without you rebuilding everything from scratch. For Rocket Lab, one investor might build a very optimistic Narrative that sees the company valued at around $98 per share, while another more cautious Narrative might land closer to $20 per share. The gap between those Fair Values captures their different views about Neutron’s success, margins and long term growth.
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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