Rocket Lab (RKLB) stock has drawn attention after recent trading, with the share price at $113.65 and strong returns over the past 3 months and year prompting investors to reassess the company.

The recent 1 day share price return of 3.24% comes after a mixed few weeks, with a 7 day share price return of down 7.14% but a 90 day share price return of 64.88% and a 1 year total shareholder return that is very large. Taken together, this suggests that momentum has been building even with short term pullbacks.

If you are looking beyond Rocket Lab and want to see what else is moving in related areas, this is a good moment to scan 33 robotics and automation stocks

With Rocket Lab delivering strong recent returns, trading above the average analyst price target and still reporting losses, investors now face a key question: is the stock undervalued, or is the market already pricing in future growth?

Most Popular Narrative: 16.2% Overvalued

According to a widely followed narrative on Rocket Lab, the fair value sits at $97.83, which is below the last close of $113.65, pointing to a premium in the current price.

Since my original post, RKLB has continued to expand its space systems business, including through acquisitions and raising more capital. Its Neutron rocket is still largely on schedule; and as expected, no major new players have arrived to take RKLBs #2 spot in space launch. This all means Rocket Lab's revenue can be expected to increase faster (though in a very lumpy manner, not the smooth curves that SimplyWallSt's valuator produces), reaching ~$44b by 2035, equivalent to around 5% market share of the ~$800B space 'backbone' economy.

This narrative leans heavily on rapid revenue expansion, higher long term profit margins and a premium future earnings multiple to support that fair value. Curious which assumptions really move the dial here.

Result: Fair Value of $97.83 (OVERVALUED)

However, this narrative could be knocked off course if Neutron underperforms expectations, or if losses persist and strain Rocket Lab's ability to fund its ambitions.

Wall Street's queuing for one rocket. While SpaceX counts down to its IPO, other companies tied to the new space race are already in orbit. → 20 Compelling Space Companies watchlist · Global Space Race Investing Ideas screener · Scan the sector by valuation on Rocket Lab's valuation page.

Next Steps

With sentiment clearly mixed, this is the moment to move quickly, review the underlying numbers yourself, and weigh up the 1 key reward and 3 important warning signs.

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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.