Rocket Lab’s shares have fallen 48.18% from a June 2026 peak of $123.32 to a July 25 low of $63.91, validating an overvaluation alert issued by InvestingPro at the time.
The company’s stock was trading at $68.28 on August 25, 44.6% below the level when InvestingPro’s models estimated its intrinsic value at $70.81, implying a 42.6% overvaluation on June 2. Rocket Lab’s market capitalization exceeded $70 billion at the June valuation point, despite reported negative earnings per share of -$0.33 and continuous EBITDA losses of $164.8 million.
InvestingPro’s fair-value methodology, which aggregates discounted cash flow models, peer comparisons, and analyst estimates, initially flagged the discrepancy between Rocket Lab’s market price and its estimated intrinsic value. The stock had surged 73.9% in May before dropping 29.15% in June, coinciding with broader sector volatility.
Rocket Lab’s revenue reached $769.1 million in the second quarter, a 13.2% year-over-year increase and above forecasts, while the company secured a $266 million contract with the U.S. Space Force and an $8 billion acquisition agreement involving Iridium. Despite these developments, the company remains unprofitable, with updated EPS of -$0.28 per share.
The decline follows a period of heightened investor scrutiny over valuations in the space sector, where high-growth narratives have clashed with profitability challenges. Rocket Lab’s shares have yet to recover to levels observed when the overvaluation warning was issued.
