Rocket Lab shares fell sharply on Thursday, dropping as much as 13% in early trading, after the company confirmed that the first flight of its Neutron rocket has been delayed into 2027. The stock had already declined 7.85% during Wednesday's regular session, closing at $59.18 before the revised schedule was announced. By 12:58 p.m. Eastern time on October 15, RKLB was trading at $52.72, down 10.92%, after touching approximately $51.42 earlier in the session.
The delay stems from manufacturing defects in the forward dome of Neutron's first-stage propellant tank, a carbon-fibre composite structure. Rocket Lab said inspections identified voids within the composite material that could reduce performance margins. CEO Peter Beck said the company investigated the issue, reproduced it in testing, and introduced changes to its manufacturing process. Although work on another composite section, the aft dome, showed improved manufacturing quality, the forward dome still must be completed and qualified before further testing can proceed.
Rocket Lab now expects cryogenic and hydrostatic qualification testing to extend into the first quarter of 2027 before it can set a firmer launch timetable. The company has not provided a specific 2027 launch date. This latest setback follows a separate qualification failure in January 2026, when a first-stage tank ruptured during pressure testing. Rocket Lab has not linked that earlier rupture to the newly disclosed forward-dome defects.
Wall Street reacted with lower price targets. KeyBanc analyst Michael Leshock cut his 12-month target to $100 from $135, a reduction of about 26%, while maintaining an Overweight rating. Leshock said the new timeline reflects one fewer revenue-generating Neutron launch in 2027 and lower valuation multiples across high-growth space companies. Clear Street analyst Gregory Pendy lowered his target to $105 from $129, a cut of nearly 19%, while retaining a Buy rating. Cantor Fitzgerald reiterated its $122 price target and Overweight rating.
With the latest drop, Rocket Lab stock has lost close to one-quarter of its value this year and sits nearly 70% below its May record. The company still has an established revenue base: in the second quarter of 2026 it reported revenue of $234.1 million, up 62% year over year, with a contracted backlog of $2.36 billion. Neutron remains central to Rocket Lab's plan to move beyond small-satellite launches into larger commercial and government launch markets, but the delay postpones operational revenue from the new rocket while development and qualification spending continues.
