Rocket Lab (RKLB) shares tumbled over 12% on July 16, hitting their lowest since mid-April and extending a brutal sell-off that has now wiped out 55% of the company’s market value from its 2026 high. The stock, which peaked at $151 earlier this year, now trades near $66, slashing its valuation from roughly $86 billion to $40 billion.
The drop comes amid a sector-wide retreat, with the Procure Space ETF (UFO) falling from a year-to-date high of $68 to $43, and SpaceX dipping below its IPO price. Analysts attribute the decline to profit-taking following massive gains ahead of SpaceX’s public debut, with the move exacerbated by weak post-IPO performance.
Despite the share-price weakness, Wall Street remains largely bullish. Morgan Stanley reiterated its Overweight rating and $105 target, Citigroup maintained Outperform, and Bank of America raised its target from $105 to $110. However, Piper Sandler initiated coverage with a Neutral and an $83 target, calling the stock overvalued relative to fair value. The analyst consensus is a Moderate Buy with an average target of $110.18.
Rocket Lab’s fundamentals remain strong: Q1 revenue surged 63.4% YoY to $200.35 million, beating estimates, and the company’s backlog grew 20% to $2.2 billion. It also announced an $8 billion acquisition of Iridium Communications to build a vertically integrated model competing with SpaceX’s Starlink. CEO Peter Beck sold 1.3 million shares under a pre-arranged 10b5-1 plan on July 7, adding to over $362 million in insider sales over three months.
Technical indicators point to further downside risk, with the stock below both its 50-day and 200-day moving averages, and the RSI trending below 50. Analysts suggest a potential drop to $60 or $50 before a rebound, possibly around the next earnings release.
