Rocket Lab (RKLB) Stock Pops 20% on Record Q2 Revenue

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Right now, Rocket Lab (NASDAQ:RKLB) is one of the few startups in the burgeoning space economy that continues to post encouraging results. The latest example involves the company’s second-quarter earnings report. Of course, profitability remains elusive for now. But Rocket did ring up blistering sales. Now, RKLB stock is soaring 20%.

Yesterday, Rocket reported a net loss of $37.4 million for the three months ended June 30. This tally more than doubled the net loss of $16.7 million in Q2 2021. However, enthusiasm for RKLB stock is centering around the top line; the firm generated $55.5 million in revenue.

This sales haul represents a significant five-fold lift against Q2 2021 (which suffered from the pandemic). Sequentially against Q1 2022, sales improved 37%.

Rocket Lab — which has a footprint in both the U.S. and New Zealand — forecasts Q3 revenue to expand to between $60 million and $63 million. On the bottom line, its adjusted earnings loss will also likely come in between $8 million and $12 million. In Q2, the adjusted loss came to $8.5 million.

CEO Peter Beck said the following about the Q2 results:

“We are encouraged by broad-based momentum that continued across our space systems business which comprised 66 per cent of our revenue in the second quarter.”

RKLB Stock Flies Head and Shoulders Above the Rest

Clearly, the market is feeling encouraged by the Q2 sales tally. But it is also recognizing Rocket’s progress in meeting fundamental targets. Beck noted in the release:

“In [Q2] our team upheld our track record of relentless execution, delivering three successful launches, more than any other small launch provider for the entire year so far.”

That’s no hyperbole. Contributing to the success of RKLB stock is the cynical reality that its space-related rivals are floundering. Like Rocket, Virgin Orbit (NASDAQ:VORB) and Astra Space (NASDAQ:ASTR) entered the public market via reverse mergers with special purpose acquisition companies (SPACs). However, cracks in the space race quickly emerged.

For instance, Virgin Orbit received “less than half the money” it originally expected with its SPAC merger. Astra Space also plunged post-debut after it “failed to carry a test payload into orbit.”

To be fair, RKLB stock — despite the enormous lift on Friday — is still down 42% year-to-date (YTD). At the same time, the Wall Street Journal recently provided some compelling arguments as to why Rocket is different from the rest.

Primarily, Rocket beats out other aspirational pre-revenue companies by actually delivering meaningful revenue. And, while Rocket has posted negative earnings, this is because the company is investing in its upcoming larger rocket, Neutron.

Given the operational successes of Rocket, especially when compared to the failures of peers, RKLB stock appears to be a viable speculative investment.

Why It Matters

Theoretically, SPACs provide more opportunities to retail investors. Essentially, the relatively easier path to market enables regular folks to participate near the ground floor of potentially compelling businesses. However, in reality, post-merger SPACs have significantly underperformed the benchmark equity index this year.

While RKLB stock pings volatile on a YTD basis, the underlying firm is still making good on promises so far. Over time, Rocket could possibly help shift SPACs into a more positive light.

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On the date of publication, Josh Enomoto did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.