‘Rocket Lab’s Geost Acquisition Is Bullish,’ Says Wall Street

Shares of Rocket Lab (RKLB) moved higher on Wednesday after the aerospace firm announced that it will acquire Geost, which is a company that builds important space technology. This deal is expected to help Rocket Lab win more U.S. national security contracts. Indeed, analysts say that it gives Rocket Lab access to key systems that are needed for defense projects like the Golden Dome and Tranche 3 of the Space Development Agency’s missile defense satellites. As a result, Bank of America’s five-star analyst, Ronald Epstein, who has a Buy rating on the stock, said that the deal builds on Rocket Lab’s space capabilities, especially after its recent purchase of communications company Mynaric.

Furthermore, the timing of the Geost deal is seen as important, since the Golden Dome defense program was just approved to move forward with a massive $175 billion plan over the next three years. Because of how large and fast-moving this project is, Bank of America believes that companies like Rocket Lab, which offer innovative solutions, have a good chance to benefit. The deal also gives Rocket Lab new technology that can be used for national security space missions, therefore putting it in a better position for future contracts.

Separately, five-star Wells Fargo analyst Matthew Akers said that buying Geost is the next smart move for Rocket Lab as it looks to provide all-in-one space services. Stifel also showed confidence in the company by keeping its Buy rating and raising its price target to $34. Interestingly, though, it is worth noting that 12.9% of the company’s stock is being shorted, which means that some investors are still betting that the stock will go down.

Is RKLB Stock a Buy, Sell, or Hold?

Overall, analysts have a Moderate Buy consensus rating on RKLB stock based on nine Buys, four Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average RKLB price target of $28.55 per share implies 2.9% downside risk.

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