The pristine two-year track record of successful launches by Rocket Lab USA went up in smoke in September, and the rocket wasn't the only thing that crashed. Rocket Lab shares are down 30.6% for the month, according to data provided by S&P Global Market Intelligence.
The ability to launch payloads into space has made Rocket Lab among other space stocks. Space science is tough, and all companies must deal with setbacks.
In September, a rocket launched from the company's New Zealand facility experienced a problem 150 seconds into its flight that forced Rocket Lab to stop the mission. The rocket and its payload were both destroyed, resulting in an automatic Federal Aviation Administration investigation as well as an internal company investigation.
In a statement Friday, Rocket Lab reduced its guidance for third-quarter revenue to $66 million, from $73 million to $77 million, forecasting sales that would fall below the $74.5 million forecast. The adaptations were the result of Rocket Lab postponing future missions while the anomaly is investigated.
The launch was Rocket Lab's 41st mission. The firm has successfully launched 171 satellites, though it did experience a launch failure in 2021.
The discontinuation is unfortunate, and the ramifications could take some time to be fully known. Despite its impressive track record in September, Rocket Lab was a speculative stock, and the incident, if nothing else, highlights exactly what can go wrong from here.
One incident is not going to be the end of Rocket Lab. Rocketry is a high-profile trial-and-error endeavor, and everyone who attempts it eventually encounters mistakes. Rocket Lab's success rate is still higher than most of its rivals, and the company remains a dependable partner for those in need of a lift.
In early 2024, Rocket Lab will launch the Electron rocket, the company's mainstay, but it is planning to bring the next-generation Neutron into service. Rocket Lab, a startup, is also a lot more than just a launch business, with about two-thirds of its total revenue from building and maintaining satellites and other equipment for customers.
To invest in space, you need a lot of patience, as well as a lot of hope. The potential of Rocket Lab remains, but in September investors got a cold, hard look at the downside should things not go to script.