Buffett Brain · Research note
Score updated 29 Oct 2026
RKLB· Industrials
Rocket Lab USA
Rocket Lab USA's negative margins and ROIC signal a lack of competitive moat and durable profitability.
Buffett fit
Weak fit
Owner
14
Durability
40
Management
53
Price
55
Score updated 29 Oct 2026
Buffett's checklist
Each number against Buffett's bar, and where it ranks among Industrials stocks in our database.
How much profit the business makes on each dollar invested in it. Higher is better.
What is left of each sale after the cost of making the product. A high number often means pricing power.
The cash the business earns for its owners, compared with the price of the whole company.
How fast sales grew each year over the last five years.
How many years of today's profit you pay for at today's price. Lower means cheaper.
How much the company owes compared with what it owns outright. Lower is safer.
The four pillars
How the business measures up on each of Buffett's four tests.
If we owned 100% of Rocket Lab, the next 10 years would focus on achieving sustainable profitability and building a competitive .
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The 10-year outlook is uncertain due to the negative profitability metrics.
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Rocket Lab's is concerning, with a share count CAGR of 4.08% indicating dilution.
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The current valuation is stretched, with a negative earnings yield of -0.21% and an yield of -0.39%.
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- The full reasoning behind all four pillars
- The 5-year price target and the return it implies
- What would change the call
- Graham, Lynch and Greenblatt on the same stock
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For and against
The strongest points on each side, with the numbers behind them.
In its favor
5- 1Revenue CAGR of 76.34% indicates strong top-line growth.
- 2Current ratio of 4.47 suggests good short-term liquidity.
- 3Debt/Equity ratio of 0.06 shows conservative .
- 4Serves diverse customers including commercial and government sectors.
Concerns
8- 1Negative of -8.07% reflects poor capital efficiency.
- 2 of -33.2% indicates significant profitability challenges.
- 3Net margin of -26.87% highlights ongoing losses.
- 4High EV/Sales ratio of 120.64 suggests overvaluation.
Price history
$58.60+317.1%· 5-year return
Weekly closing prices. Touch or hover the line for a date.
The business
How the business works
Rocket Lab USA provides launch services and space systems solutions, including small and medium-class rockets and satellite platforms. The company serves commercial, aerospace, and government customers. With a five-year revenue CAGR of 76.34%, the business is in a high-growth phase. However, its unit economics are challenged by negative of -33.2%.
How this analysis has moved
The call has held across 6 reviews.
Sep 27, 2026 → Oct 28, 2026
What other investors would say
The same company, judged by three other documented playbooks.
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