Rocket Lab (NASDAQ:RKLB) stock has reversed in the past few weeks, moving from a record high of $150 to the current $63.9, with its valuation falling from $82.9 billion to $38.2 billion. 

Rocket Lab Stock Dropped as Space Shares Plunged

This retreat has coincided with the ongoing sell-off in SpaceX (NASDAQ:SPCX), which has fallen from a record high of $225 to a record low of $110. The closely watched Procure Space ETF (NASDAQ:UFO) has plunged 37% from its high for the year.

Rocket Lab stock continued its sell-off after announcing a $8 billion deal to buy Iridium, a company that provides worldwide voice, data, and navigation services. Iridium counts the US government and companies like Vodafone and Garmin as clients. 

Rocket Lab expects that the deal will give it an immediate foothold in space-based applications like Internet of Things (IoT) and direct-to-device, and critical safety-of-life services. Also, its communications service will make it a direct competitor to SpaceX’s Starlink.

On the positive side, Rocket Lab’s business has continued growing. The company recently inked a $266 million deal with the Pentagon. This deal will see it provide 12 suborbital launches with an option for six more.

RKLB Business is Growing

Its recent results showed that Rocket Lab’s business continues growing across the board. Its revenue jumped by 63.5% in the first quarter to $200 million as its launches jumped from 5 to 6 and as its space systems revenue jumped. It ended the quarter with $2.2 billion in revenue backlog, with most of them being in its space systems.

Wall Street analysts are optimistic that Rocket Lab’s business has more room to grow, helped by its HASTE and Neutron business. Neutron will be a direct challenger to SpaceX’s Falcon 9 in the medium-lift launch market. While Electron serves small satellites, Neutron will target much larger commercial, government, and defense missions.

The average estimate is that Rocket Lab’s revenue jumped by 59% to $230 million. Its annual revenue is expected to jump by 52% to $918 million, and will be followed by $1.28 billion next year.

Most analysts tracking the company have a bullish outlook for the RKLB stock. Bank of America boosted its target from $105 to $115, while Citizens hiked the target from $95 to $130. Needham boosted the target to $120, while the consensus forecast among analysts is $110.

RKLB Stock Technical Analysis

The daily chart shows that the Rocket Lab stock has been in a strong freefall in the past few months. It slipped from a record high of $150 to the current $63. It recently dropped below the 100-day moving average and the Strong, Pivot reverse of the Murrey Math Lines tool. It moved below the key support of $80, its lowest level on June 26.

Therefore, while the stock’s outlook is bearish, chances are that it may bounce back as investors start buying the dip in space companies. If this happens, it may rebound to the Major S/R pivot point of $100.

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