Why Rocket Lab (RKLB) Stock Is Down Today and Why KeyBanc Remains on the Sidelines

Rocket Lab (NASDAQ:RKLB) stock’s big rally appears to be on hold, at least temporarily, with the stock down in Tuesday’s session.Claim 55% Off TipRanksUnlock hedge fund-level data and powerful investing tools for smarter, sharper decisions Discover top-performing stock ideas and upgrade to a portfolio of market leaders with Smart Investor Picks Shares have mostly been on a sharp upward trajectory over the past year (up by 408%), with the stock’s momentum intact following the space company’s recent Q1 report. The dip seems mostly driven by profit-taking as investors cash in on these massive gains, along with broader market concerns around rising treasury yields and persistent inflation. The pullback will probably make sense to KeyBanc’s Michael Leshock, an analyst who ranks among the top 4% on Wall Street. Leshock likes the company, but doesn’t see the stock as appealing at current levels. “We continue to view RKLB as one of the highest-quality companies within the Space sector, though the equity’s risk/reward profile appears balanced in the near to medium term,” Leshock explained. Accordingly, Leshock maintained a Sector Weight (i.e., Neutral) rating on the shares, while having no fixed price target in mind. (To watch Leshock’s track record, click here) While Leshock remains on the sidelines, he nevertheless notes several positives following the Q1 print. The 5-star analyst thinks the company “continues to execute on its strategy of expanding vertical integration across the space value chain” through a mix of acquisitions and internal development. The acquisition of Mynaric brings optical communications capabilities and expands RKLB’s presence in Europe, which could support additional sovereign and constellation-related opportunities. The company also recently completed the acquisition of Motiv, adding space-grade robotics and precision mechanisms, including motion systems and solar array drive assemblies, to its in-house capabilities. Together, these moves reflect a broader effort to internalize more of the satellite manufacturing supply chain, which Leshock expects will improve cost management, increase schedule predictability, and strengthen competitiveness in large-scale defense and commercial constellation programs over time. Space stocks in general have benefited from the hype around SpaceX’s upcoming IPO (June 12, according to The Wall Street Journal). Leshock views the June listing as a potential “liquidity event” for early SpaceX investors at a valuation above prior funding rounds, which might in turn encourage capital flows toward smaller publicly listed space companies. However, the extent to which this rotation has already been priced in remains unclear. RKLB and other space-focused stocks have more than doubled since SpaceX started signaling it was serious about its IPO intentions in December 2025, though, in RKLB’s case, this move is also influenced by ongoing execution, an $800 million-plus contract award, and increasing activity from the U.S. government and NASA. “It is challenging to bifurcate what portion of the run up resulted from the mega-cap IPO and new institutional (and retail) eyes on the sector, though we maintain it is a positive event over the longer term,” Leshock summed up. So, that’s the KeyBanc view, but what does the rest of the Street have in mind for RKLB? Based on a mix of 11 Buys and 4 Holds, the analyst consensus rates the stock a Moderate Buy. However, the $100.17 average price target suggests the shares are overvalued by 20%. With this in mind, keep an eye out for price target hikes or rating downgrades shortly. (See RKLB stock forecast)