Is it still worth buying the dip after Rocket Lab's stock price has slumped by 50%?

Rocket Lab ( RKLB )'s 2025 has been like a roller coaster. Since the beginning of the year, the rise has reached 176%, surging to a high of $74 in mid-October, only to experience a big dump of 38% within a month, dropping below $43 this Tuesday. The culprit is the CEO's admission that the Neutron rocket's maiden flight has been postponed to early 2026 — the delay means the profit timeline will also be pushed back.

This is a typical story of “buying high and selling low.” Rocket Lab is essentially a good company: it has successfully launched its Electron rocket 75 times over the past eight years, with a gross margin of 32% and revenue growth of 15 times in five years. Wall Street is optimistic about its potential to achieve GAAP profitability as early as 2027. The problem is that the stock price was previously inflated to a perfect expected price—its price-to-sales ratio reached 63 times.

The current issue is even more heartbreaking: even if it falls to $43, the market value is still $23 billion, while the annual revenue is only $555 million. The price-to-sales ratio remains as high as 40 times - still very expensive. Moreover, due to the delay of Neutron, this company is further away from profitability.

So Wall Street analysts are silent now. Those who once shouted to buy at $74 are now too afraid to add to their positions even at $43. A rule of thumb: when momentum disappears and the company is not yet profitable, even if the stock price is halved, it may still not be true value.