Just about any bit of positive or negative news is enough to send a stock soaring or sinking in today’s meme-ified metaverse of investing. The trend has made the real news events, like year-end earnings reports, seem more anti-climactic than ever. Such was the case a few days ago when Rocket Lab (RKLB) released its 2023 results. It was pretty much a non-event after investors had punished the company a month earlier after it had revised its Q4-2023 guidance downward and announced $355 million in convertible notes.
The double news whammy sent Rocket Lab stock down nearly 20% at the time because a) investors do not like to learn that company revenues are going to fall short of expectations regardless of the reason and b) they definitely do not like the prospect of share dilution (more on that later). That meant, short of any other big revelations, the stock barely budged when Rocket Lab’s charismatic CEO Peter Beck did the company’s big year-end wrap-up at the end of February. Still, there was plenty to unpack from the numbers and the news from one of the most popular stocks that we cover.
Launch No Longer Losing Money
Let’s get the more mundane stuff out of the way. Rocket Lab grew 2023 revenues about 16% from the year before to nearly $245 million. More importantly, from our perspective, the company more than doubled gross margin from 9% in 2022 to 21% in 2023. That’s been a real sticking point for us in terms of investing in Rocket Lab stock. It appears the company is figuring out the right revenue mix so that it can at least start generating some positive cash flow in the near future –
