So yesterday I sent a message only to people that follow me about $Rocket Lab USA, Inc.(RKLB)$ their earnings call was after market today, so I wanted to give my opinion on what would likely occur to my friends in tiger. I also shared the returns I have made on the stock. Over US$ 30k on the stock from an initial investment of about US$3k. So a 10x on the stock basically. But that excludes the profits I also made buying, excising and selling long calls. About another US$10k.
So my prediction was correct. I expected rocket lab to announce a delay in the launch of their new neutron rocket which would cause the price to drop. And after market it did, about 5%. Tomorrow I expect it mite recover a little or just flatline. But next week I expect it to recover. How can I be so certain? Well let me explain my investment thesis in detail.
When I seriously deploy a large percentage of my portfolio into a stock, I must know everything I possibly can about that stock. I must understand its products/services, the market they are in, the strategies they deploy to exploit market opportunities in the short and long term, their moat. And the hardest bit is understanding the management and the company culture that brings it all together.
Rocket lab has an insane moat. They are the worlds most successful small launch rocket company in history, with 70+ successful electron launches To date. And very soon their new neutron rocket will enable serious deployment of constellations (this will take time though). A few years still add meaningful cash flows.
But launch revenue currently represents less than 25% of total revenue. Their space systems business is the main business. They own most of the space value chain, and continue to acquire or build everything else. They own the businesses that produce almost all of the critical components needed to build everything that goes into space. We are talking solar panels, reaction wheels, tracking systems, buses, comms systems, and they build satellites too. two satellites are currently going to mars for example. plus they build the software to make it all happen. $Intuitive Machines(LUNR)$ recently was the first ever commercial business to successfully land on the moon, but rocket lab got them there with their software. The innovation is beyond insane.
So their products and services are a massive moat, the strategies they deploy, like owning the entire space value chain increase the moat significantly. They are a one stop shop for everything space.
But I mentioned the difficult bit. Understanding the company culture. Sir Peter beck is the founder, CEO and chief engineer of rocket lab. Adam spice is the CFO and quite frankly the M&A assassin. The entire company ethos is based on working very hard and very smart. Perfection is the baseline not the hopeful goal. It's a rocket program, so failure is always a risk. Yet it's not treated as acceptable. While others blow stuff up to learn, or worse, push deadlines out for years cause they just don't get stuff right. Well rocket lab "doesn't have the money, so they have to think".
The rocket lab culture is the perfect storm. It's entrepreneurship. Not just inventing something cool. It's inventing something that people need, and scaling it. It's also about honesty, integrity and delivery. I am a New Zealander, (kiwi). I married a California girl many year back. so I do speak fluent American, and fluent kiwi. we both Speak English btw, but deliver differently.
I'm now getting to the point of this article. Which is today's earnings call by rocket lab. in New Zealand we have to do everything with nothing, perfection is essential. My father a veteran of world war two never spoke about his actions. But he had two Purple Hearts. That's wounded in action.
He did tell me, a few times... yanks... where there is lead there is hope. This mite sound obscure, but it's important. A combination of kiwi ingenuity and American might createS a perfect storm. That's what is happening in rocket lab.
The earnings call today was a kiwi and an American, CEO and CFO on exactly the same page. the message was reserved... no hype, just honest delivery.
Yes the neutron rocket is not expected to launch til q4 2026, a one month delay. And the stock dropped 5%, nonsense. Realistically I think it will be pushed out to 2027. Today it's a buy, months don't matter. You must understand that rocket lab is the future of space exploration.
Elon musk is a disrupter, but he is a wild card. Peter beck is a disrupter too, he actually said that today in the earnings call. But safe hands.
So I have now listened to the earnings call three times, revenue record high, gross margins best ever. All financials are great. 2 new accusations Too much information for the lazy sheep of wall street to absorb tomorrow.
A one month delay on a rocket program that will costs millions and deliver while others will cost billions be a year out and not deliver. Simple maths
@TigerTrade @Tiger_SG @TigerWire @Tiger cub @MillionaireTiger @MojoStellar @welL Eyes
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