Rocket Lab (RKLB 1.65%) stock has taken investors on a wild ride this week, slumping on Tuesday's news that the rocket maker had missed Wall Street's sales target in the first quarter, then recovering on Wednesday.
Investors might have felt encouraged that Morgan Stanley analyst Kristine Liwag, in a note on StreetInsider, lowered her price target on Rocket Lab stock to $8 a share. Why would investors think a lowered price target is good news? Simply because $8 is roughly twice Rocket Lab's current price. Translation: Rocket Lab stock could double, and is still a buy.
Is Rocket Lab stock really a buy?
I have to admit: I'm a bit skeptical. On Wednesday, I argued another banker's price target of less than $6 a share might pan out, and Rocket Lab could rise 40%, if the company succeeds in earning a profit in 2026 as it's expected to. But $8 a share? More than twice the current price?
That's more of a stretch.
It's not impossible, however. Sure, right now, Rocket Lab is a distant No. 2 behind SpaceX in the number of rockets launched in the U.S. annually. In 2023, Rocket Lab launched a grand total of just nine rockets, while SpaceX launched 98 times, including four Transporter missions bundling aboard dozens of the kinds of small satellites Rocket Lab specializes in launching, at prices far below what Rocket Lab can afford to charge.
Fast-forward to 2026 however, and a lot of things could change in the space industry. By 2026, SpaceX should be regularly launching mega-sized Starship rockets, lowering its launch costs even more -- but making it harder to find enough small satellites to fill them up. Logically, SpaceX would shift its focus to launching larger payloads, and could abandon the small satellites market. This in turn would create opportunities for Rocket Lab to launch more Electron rockets, and even larger Neutron rockets -- and earn more profit doing so.
It's a long shot, but in such a scenario, $8 a share isn't an unreasonable price target.
