Welcome investors! In this video, we're going to talk about Rocket Lab, ticker symbol RKLB. Rocket Lab is the third largest position in my portfolio. I've been talking about it here on the channel for like three or four months, so I hope a lot of you guys got in before

this huge run-up. My position has an average cost of $4.82 per share, so I can't complain, but I'm making this video because over the past week I've been receiving dozens of DMs asking if it's too late to buy Rocket Lab or if it still presents a great

opportunity. As I always said, don't forget to subscribe to the channel because I'm constantly looking for new opportunities to share with you, but without further delays, let's start the video. I know that I already explained Rocket Lab's investment thesis several times in some of my previous videos, but

before talking about its numbers, I really need to explain everything once again. First, it's important to mention that I decided to do some research on this company because the space industry is reaching new heights with major developments happening globally each week. By 2035, the global space economy is

projected to hit $1.8 trillion, up from just $630 billion in 2023. The key drivers include the growing need for satellite connectivity, the increased demand for mobile positioning and navigation services, and the expanding use of AI and machine learning for insights. These

advancements will help tackle some of the world's biggest challenges, such as climate change, disaster response, global communication gaps, agriculture efficiency, and much more. And there are dozens, if not hundreds, of other potential applications being studied, such as the development of manufacturing in orbit for specialized materials that

can only be produced in zero gravity environments, uh, offloading data storage or computing power to satellites in space, and many other applications that I will mention uh later on in the video. Besides SpaceX, Rocket Labs stands out as one of the companies that will massively benefit from this trend, and let me

explain to you why. Let's start by addressing a common misconception about the company. Rocket Lab isn't just a launch business, it's an end-to-end space company. Sure, they are industry leaders in rocket launches, Electron for small launches and the upcoming Neutron for

breaking into the medium launch market, but that's only one part of what they do. Peter Beck breaks it down into three key areas. First, the right to space. Getting to space is the first step, and Rocket Lab has mastered this with their Electron rockets and soon with Neutron

which will tackle the medium launch market as I said. And by the way, guys, it was because of this upcoming Neutron that I got really excited about Rocket Lab. It's expected to be released by mid-2025 and will be a game-changer for the

company's revenue and capabilities. Then we have the tools to do things in space. Once in space, the real work begins. Rocket Lab isn't just sending things up, they're also providing the spacecraft components, software, and ground systems needed to make missions successful in orbit. They are already delivering these

for commercial and government customers. And finally, the end use, which is related to space data and services. This is where the long-term value lies. By owning both the launch and spacecraft sides, Rocket Lab can develop and deploy space capabilities like constellations without the delays and costs that others face.

This positions them for long-term recurring revenue with incredibly high margins. In short, Rocket Lab's vision goes far beyond just launching rockets. They're building the infrastructure for a complete space ecosystem, and this broader vision is key to understanding their achievements now and in the future.

Now let's dig more into each of these parts. Inside the first one related to the right to space, we have small and medium-sized launches. The Electron rocket, which is the undisputed leader in small launches, was actually the first reason why Peter Beck founded Rocket Lab.

His vision was to make space more accessible by developing lightweight rockets designed specifically for launching small satellites, a growing need in the industry. And it was a tremendous success in democratizing the access to space. Electron offers something unique in the launch market: a dedicated launch service tailored to each customer's specific needs.

And this means customers can choose and change their launch date, select their launch site, and decide exactly where they want to be deployed in orbit. Plus, they can launch on incredibly short notice, sometimes as fast as eight weeks from contract signing to orbit. And this flexibility is something larger rockets simply can't offer.

However, this flexibility also makes it hard to predict exactly how many launches will happen in a given quarter, which can cause some surface-level volatility in revenue recognition. But here's the key part: Rocket Lab collects most of the cash, up to 90% of the contract value, well before launch day thanks to their billing model. So even if a launch date shifts, the impact on cash flow is minimal. The revenue is actually recognized only on the launch day due to accounting practices, but the cash is already in hand, showcasing the strong underlying cash flow in their business.

business, it's important to note that Electron is the fastest commercially developed rocket to reach 50 launches, and it's on track to be the fastest to reach 100 as well, faster than Falcon 9. From a, I could talk a bit more about its

achievement so far, but to be honest, there's nothing you can argue against the fact that Rocket Lab is the undisputed leader in small launches because of Electron's differentiated capabilities and proven track record. Regarding medium-sized launches, Rocket Lab is developing the Neutron rocket

which is expected to be operational by mid-2025. With everything adding in the right direction, SpaceX has currently a practical monopoly in the medium launch markets, and demand is rapidly growing, especially for constellation deployments with over 10,000 satellites needing to

be launched by the end of the decade. Neutron is perfectly positioned to disrupt these markets with a launch price of between 50 and $60 million compared to Electron's price around $8 million. Neutron is set to be a game-changer for Rocket Lab's revenue, but

besides being so important in wrapping up the company's revenues through both commercial and government customers, Neutron is also the last thing that Rocket Lab is missing to essentially have the same capabilities that SpaceX has right now. And this is key to understand the investment thesis, but

I'll explain it in more detail when we address the last part of this end-to-end space ecosystem. Last week, Rocket Lab reported its Q3 results, and the stock exploded over 50% in the day after. And the reason was that Rocket Lab has

signed a launch agreement with a commercial constellation operator, marking a significant step for Neutron. This deal covers two early launches for the operator, and Peter Beck emphasized that the strong reputation Rocket Lab has built through the success of Electron was key in securing these early contracts. The company has carefully

selected its first customers for Neutron. They actually said that they are in the fortunate position of being able to choose who flies first, allowing them to be strategic in their approach. Peter Beck expressed confidence that these two initial launches will lead to a long-term partnership, potentially

deploying the customer's entire constellation in the future. Unlike many companies that sign non-binding agreements or sell missions to fund the rocket's development or anything else, Rocket Lab has been methodical about when it opens bookings for Neutron. Peter Beck underscored that the company is

committed to delivering a real rocket to the market before finalizing the contracts, ensuring a premium price for their services. As Neutron's first flight in 2025 draws closer, conversations with customers have become more refined and demand for launch slots has started to mature. Peter Beck also highlighted that

Neutron has been designed with specific programs like the U.S. Space Force National Security Space Launch program in mind, and the Space Force recently released requests for proposals for the next round of these program missions. Rocket Lab intends to compete for a share of up to $5.6 billion in

National Security launches. Neutron's capacity to diversify and secure National Security space access positions it as a strong contender in the sector. Now let's talk a bit about the competitive advantages of Rocket Lab when comparing it with its competitors. One of the most impressive things

about this company when it comes to uh developing rockets is that the company develops impressive rockets at a much lower program cost than its competitors including SpaceX. This cost efficiency stems from their unique approach and extensive experience. They quickly identify and address issues at the

component level rather than waiting for problems to arise in more complex systems, thereby avoiding expensive fixes later on. In essence, Rocket Lab's strategy of rapid iteration combined with their proven expertise and efficient testing procedures enables them to develop and launch rockets more quickly and cost-

effectively than many of their competitors, whether established companies like SpaceX or new entrants in the industry. And a crucial factor in this, and again, one of the things I love the most about Rocket Lab is that it is the most vertically integrated space company in the world. Here's a quote from

the CFO where he explains how they got there. "One of the things we've done very consciously is eliminate many choke points to make us more self-reliant on the rocket side. Out of necessity, when Peter started the company in New Zealand, he faced restrictions when he tried to

buy subsystems from the traditional aerospace industry. They said, 'Sorry, you're not a US company, so we can't sell you that technology.' So Peter said, 'Okay, I'll make it myself.' And as a result, we became very independent and vertically integrated. We're likely the most

vertically integrated rocket manufacturer out there, which reduces our dependency on others who could let us down and cause trouble. Peter has been very disciplined in identifying where others could harm us and has essentially taken those risks off the table. This not only helped in developing rockets faster

as I said and at much lower program costs, but also in expanding the company's capabilities beyond rocket launches, a topic that I'll address right now. Guys, Peter Beck is a complete genius in the space sector and it's a huge part of the company's investment.

ises in my honest opinion. Now, in the second part of the end-to-end space ecosystem that Rocket Lab is building, related to the tools to make things happen in space, we have the space systems segment of the company's operations. This segment focuses on building and

providing the technology that makes uh space missions possible essentially. And this includes things like satellites uh that design and build small satellites that can be used for several purposes like gathering data from Earth, communications, or scientific research. Then components, they make important parts uh that go into satellites and

spacecrafts such as solar panels for power, sensors for data collection, and radios for communication. And then software and ground systems, they also create the software and systems that help to manage the satellites from Earth, ensuring everything works properly in space. So, in short, the segment helps put

working satellites in space and supports their operations. And this is exactly why I believe Rocket Lab has a huge advantage versus its peers. The company develops everything in-house and doesn't rely on any supplier. It all started in 2020. Rocket Lab's success with the

Electron rocket set the stage for significant expansion and diversification. So, the company began broadening its focus beyond solely providing launch services. The strategic shift aims to create a more comprehensive suite of space-related products and services, enhancing its position in the space industry. One of

The major milestones in these diversification efforts was the introduction of Rocket Lab's Spacecraft Development Division in 2020. Rocket Lab launched its Photon satellite platform, marking its entry into the spacecraft sector. The Photon platform offers a complete satellite solution, including design, manufacturing, and operations by

providing end-to-end satellite services. Rocket Lab expanded its role from just a launch provider to a full-service space company. This Photon satellite platform is designed to meet the needs of a wide range of missions, from Earth observation and scientific research to

communications and technology demonstrations. And this move allowed Rocket Lab to cater to a broader spectrum of clients and projects, further solidifying its presence in the space industry. But this expansion into space systems was not just about in-house developments, it was actually very much driven by a series of

strategic acquisitions. In 2020, Rocket Lab acquired  Syler Interplanetary, a leading satellite hardware manufacturer, which improved its capabilities in producing key satellite components like reaction wheels and star trackers. This acquisition was followed by others aimed at enhancing Rocket Lab's technical

offerings. For instance, in 2021, Rocket Lab acquired Advanced Solutions and Planetary Systems, expanding its ability to provide mission simulation, flight software, and spacecraft separation systems. Then in early 2022, the acquisition of Sol Aero Holdings, a leader in space solar power

products, added the critical capability of manufacturing advanced solar cells for space applications. Additionally, Rocket Lab acquired SGP Technologies, bringing on board the facilities and team based in Warkworth, New Zealand. And these acquisitions have allowed Rocket Lab to offer a full range of satellite and spacecraft technologies, making it

one of the few companies capable of providing in-space and mission solutions from spacecraft to launches by combining its in-house innovations like the Photon platform with these strategic acquisitions, Rocket Lab has positioned itself as a key player in both the launch and space systems, as I said

significantly broadening its service offerings and increasing its competitive advantage. While most people think Rocket Lab is just a launch company, the space systems segment actually accounted for roughly 80% of last quarter's revenue, increasing by 81.2% year over year and

around 9% quarter over quarter. This revenue mix will certainly change once Neutron rocket is ready, but right now it serves as a pretty solid argument against the most common misconception about this company. Finally, let's talk about the most important part of all this, the ultimate goal of this end-to-end

space ecosystem: space data and services. This is where the long-term value lies. By owning both the launch and spacecraft sides, Rocket Lab can develop and deploy space capabilities like constellations without the delays and costs that other companies face. Just like SpaceX is doing with Starlink, this is basically the

ending point of the end-to-end space ecosystem that Peter Beck has been building for many years, and Neutron is literally the last piece of the puzzle, and it has never been so close to happening. Essentially, there are many applications and business models enabled

by deploying and operating spacecraft or satellite constellations. Once Rocket Lab completes its end-to-end space ecosystem, it will be able to pursue whatever opportunities it chooses. I didn't quite understand this at first, but these include services like satellites

providing imaging and data collection for agriculture, environmental monitoring, disaster management, and defense. Uh, also satellite communications, uh, with advancements in real-time connectivity for IoT devices, autonomous vehicles, and global networks, or the development of manufacturing in orbit for specialized materials as I said that can only be

produced in a zero-gravity environment, and this includes high-precision optics, pharmaceuticals, or even semiconductors. Also, off-floating data storage or computing power to satellites in space, which has several advantages among many other potential applications. I didn't realize how huge the potential of the

space economy was until I learned about some of the real-life applications it can have. I just gave you a few examples, but there are dozens, if not hundreds, of possible business models to be built in space, and I guess that's why it's becoming a trillion-dollar industry.

Peter Beck was already asked several times about what are Rocket Lab's intentions when it comes to building its own constellations in space, like what are the types of markets that they intend to enter, etc., etc., but it didn't reveal specifics so far. What we know is

that they have a clear plan. They know exactly what they want to do, but obviously it wouldn't be smart to tell everyone what's their plan if we're still a couple of years away from that. What Peter Beck said though is that the biggest idea to happen in space has not

been thought of yet, and to be honest, guys, I truly believe in his vision, so I can't wait to know more details about this. So now let's finally answer the question of this video: Is it too late to get in, or is this just the beginning of

Rocket Lab's story first. Always remember that this is just my opinion, but what I would answer is that it all depends on your intent with these investments. If you're looking to buy it as a short-term trade, I have no idea what might happen in the next few months. We just witnessed a

huge run-up, and so a correction wouldn't really be surprising. However, here I must say that I'm also bullish in the short term because as we move closer to Neutron's first launch, I believe institutions are starting to put their eyes on Rocket Lab. And since Q3 results

we've already seen several price target revisions, so the sentiment is clearly changing. But the short term, as always, is quite unpredictable. But if you plan to hold it for years, I'm confident it will be worth much more than today's $11 billion market cap. That's why I'm not

selling or trimming my position anytime soon, even though I'm already up like 400% in the matter of less than four months. Just think about it: Rocket Lab is a few years away from being a pretty close competitor to SpaceX, and last week SpaceX got a new valuation of over

$250 billion, which is still like 25 times Rocket Lab's current value. And you can say that most of the valuation comes from Starlink, but as I just told you, Rocket Lab will finally have the ability to build its own constellations just like

SpaceX is doing with Starlink. And from 2019 to 2024, that generated a valuation of over $100 billion due to Starlink alone. So the upside potential for Rocket Lab in the next decade is beyond incredible. I truly believe that both

companies will continue to grow insanely well as the space industry is still in its early days and when SpaceX gets to a $1 trillion dollar valuation, which I think will inevitably happen anytime in the next 5 to 10 years, Rocket Lab will, in my opinion, most likely be at least a

$200 billion company, which is like 20 times its current value. Again, never forget that this is just my opinion so you should always do your own research, but to be honest guys, I think this is just the beginning of Rocket Lab's story. That's all for today guys, I really

hope you enjoyed the video. Let me know in the comments down below what you think about Rocket Lab and if you own it or not. Thanks for watching and see you in the next one.

Is It Too Late to BUY Rocket Lab? Everything You Need to Know About RKLB Stock 🚀

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