Every Rocket Lab USA Investor Should Keep an Eye on This Number

It's not always an easy task to determine which figures matter more when investing.

For example, which metric is more important? Sales? Earnings per share? Net debt?

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

The answer, of course, is that it depends. What's crucial for one company or industry is often less important to another.

Rocket Lab USA (NASDAQ: RKLB) stock has witnessed a nearly 400% appreciation over the last 12 months. So with regards to its business, which is the most important number investors should be keeping an eye on?

It's all about revenue growth

Rocket Lab is a hypergrowth stock. That means it is in the very early stages of its life cycle, having come public via a SPAC merger in 2021.

With a market cap of only $8.4 billion as of this writing, Rocket Lab remains a small company. For context, it would take roughly 400 companies the size of Rocket Lab to match Apple's massive $3.3 trillion market cap.

So, for smaller companies like Rocket Lab, it's common to focus on growth over profits -- at least to start. That's why investors should zero in on Rocket Lab's revenue growth. This figure is reported in each quarterly report, showing how much revenue grew on a percentage basis when compared to the same quarter in the prior year.

For example, in its most recent quarterly report (for the three months ending on Dec. 31), Rocket Lab registered quarterly revenue growth of 121%. Indeed, over the last two years, the company has averaged revenue growth of 48% -- exceptional growth.

What to watch

Nevertheless, this high growth rate does present a risk -- if the company's growth rate were to decline, its stock could tumble.

That's why investors should keep an eye on it -- along with analyst estimates. According to consensus estimates compiled by Yahoo! Finance, analysts expect Rocket Lab to deliver 33% revenue growth in 2025.

While still impressive, that figure would represent a deceleration in growth and could trigger a decline in the company's stock price. Therefore, investors should keep a close watch on it going forward.

Don’t miss this second chance at a potentially lucrative opportunity

Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.

On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:

• Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $281,057!*
• Apple: if you invested $1,000 when we doubled down in 2008, you’d have $42,114!*
• Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $502,905!*

Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.

Continue »

*Stock Advisor returns as of April 1, 2025

Jake Lerch has positions in Rocket Lab USA. The Motley Fool has positions in and recommends Apple. The Motley Fool recommends Rocket Lab USA. The Motley Fool has a disclosure policy.