Rocket Lab Keeps Landing Defense Deals. Here’s Why Analysts Aren’t Getting More Bullish.

Jabran Kundi

Tue, September 8, 2026 at 6:02 PM GMT+3 4 min read

RKLB -4.25%

The front of a Rocket Lab corporate office by Emagnetic via Shutterstock

Rocket Lab Corporation (RKLB) has steadily expanded its defense presence in 2026, adding another contract win to its growing national security portfolio. The company continues to strengthen its position in the defense and government space. That gives investors further evidence that it is diversifying beyond its traditional opportunities. But the growing contract pipeline has not convinced every institutional investor that RKLB stock still has significant upside potential. The key issue is no longer whether Rocket Lab can continue securing major defense contracts. Instead, the debate has shifted to whether the market has already priced much of that success into the shares. That question is central to how the market is viewing the announcement.

Rocket Lab Joins $981 Million Space Force NITE-STAR Program

The company strengthened its defense pipeline again on Aug. 17, after being onboarded to the U.S. Space Force's NITE-STAR IDIQ contract. Space Systems Command manages the agreement, which carries a ceiling of $981 million. It allows Rocket Lab Corporation to compete for task orders covering satellite development, ground systems integration, digital test environments, and space software engineering. These capabilities will support a distributed test and training architecture designed for high-threat environments.

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The NITE-STAR opportunity adds to the company's growing list of defense wins in 2026. Earlier, on Aug. 4, it also secured the $397 million SB-AMTI contract. That was followed by a $266 million suborbital launch agreement in late July. Together, these awards deepen Rocket Lab's defense pipeline, though NITE-STAR itself is a contract ceiling that carries no guaranteed revenue until the company wins task orders. By mid-August, its backlog had climbed to a record $2.4 billion.

About Rocket Lab Stock

Founded in 2006, Rocket Lab is a space company that is focused on providing launch services and space systems solutions. The company operates in the space systems and launch services segments. Its offerings include launch services, spacecraft components, spacecraft design & manufacturing, optical systems, and others.

Over the past year, Rocket Lab outperformed the broader market. RKLB stock gained 37% compared with an 18% gain for the S&P 500 ($SPX). However, that trend has reversed in 2026. The stock is down 6% year-to-date (YTD), while the S&P 500 has gained 12%. The decline reflects broader weakness in unprofitable small-cap growth stocks as investors have become more cautious and shifted toward profitable defensive stocks.

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A Record Quarter With Margins Still Climbing

During the second quarter of fiscal 2026, the company generated a record $234 million in revenue. Space Systems segment revenue reached $189.5 million, while the Launch Services segment delivered $44.6 million in revenue. On the profitability side, Non-GAAP gross margin for the quarter came in at 41.5%. At the end of the quarter, Rocket Lab had $2.4 billion in cash and cash equivalents.

Going forward, the company projects third-quarter revenue to range from $250 million to $265 million. GAAP gross margin is expected to range between 29% and 31%, while non-GAAP gross margin is forecast to range between 35% and 37%.

What Do Analysts Expect for RKLB Stock?

BTIG analyst Andre Madrid reiterated a "Hold" rating on the stock, saying it already reflects the company's stronger revenue outlook and narrower EBITDA loss. He says the Neutron program remains on schedule, but the program still has important milestones ahead. The most essential is final propulsion qualification. The analyst views the Iridium acquisition and Rocket Lab's government contracts as attractive elements of the company's long-term strategy. At the same time, Andre Madrid believes investors should remain cautious in the short term because of the capital requirements and integration challenges associated with its expansion.

The NITE-STAR opportunity reinforces the progress Rocket Lab is making in the national security space, adding to a growing list of defense wins. However, the announcement does not resolve the main concerns surrounding the stock. Rocket Lab continues to make operational progress. However, its valuation remains a hurdle, while Neutron still needs to prove itself through execution. Those factors are why recent contract wins, including NITE-STAR, haven't been enough to move analysts' targets higher.

RKLB stock still holds a consensus "Strong Buy" rating from 19 Wall Street analysts, with an average price target of $111.56, implying roughly 69% upside from current levels. The apparent contradiction is the whole point. Analysts remain positive on the long-term story. But the muted response to recent wins suggests they believe much of that success is already reflected in the price.