In case you hadn’t heard, Rocket Lab (RKLB +2.69%) had some horrible news to tell investors last week (except it’s not really so horrible). Once again, the company has decided to postpone the inaugural launch of its new Neutron reusable rocket.
What’s more, Rocket Lab is being pretty vague about exactly when it hopes to launch.
Image source: Rocket Lab.
Rocket Lab’s terrible, horrible, no good, very bad day
Rocket Lab broke the bad news about Neutron in an after-hours webcast on Oct. 14. The company had been hoping to get its first Neutron rocket off the ground before the end of 2026. But a problem arose during the manufacturing of the carbon composite “domes” assembled to form the tops and bottoms of its first-stage propellant tanks.
In essence, Rocket Lab discovered air pockets forming between the carbon composite layers that are laid down to form the domes. The air pockets weaken the structural integrity of the domes. They wouldn’t necessarily cause the domes to fail and the rocket to explode in flight, but Rocket Lab didn’t want to take chances and decided to delay the first flight until it could come up with a new manufacturing process to prevent air bubbles from forming.
You might think investors would approve of this approach, designed to make sure Rocket Lab’s first Neutron flight did not end in disaster. But in fact, investors sold off Rocket Lab stock on the news, and the shares closed last week down 25%.
Now, the good news is that Rocket Lab thinks it’s figured out a fix. “We’ve solved the problem,” announced CEO Sir Peter Beck. The bad news, though — or more precisely, the worse news — is that the new delay into 2027 might be even longer than it sounds.
Management said it’s now targeting a Neutron launch in 2027, but didn’t specify when. Worse, Beck acknowledged that the 2027 target itself is “an ambitious timeline,” which appears to imply that 2027 is itself a deadline that Rocket Lab may fail to meet.
RKLB Rocket Lab
$52.60+$1.38 (+2.69%)
NASDAQ · As of 4:00 PM ET 10/23/26
What it means for Rocket Lab investors
So precisely how worried should Rocket Lab investors be about all of this?
Honestly, I think “worried” might be the wrong reaction here. If you own Rocket Lab stock, it’s probably too much to hope you’d be happy about the news of yet another launch delay. But I suspect the correct attitude is more one of impatience to see that first flight, rather than worry about what a delay might mean for Rocket Lab stock.
Even if everything had gone right with Neutron’s development, Rocket Lab was only anticipating one launch this year, followed by three next year, and five the year after that.
Simply put, the plan was always to roll out this rocket slowly, step by step, and increase its launch cadence over time. Given that it would take years for Neutron to move the needle on Rocket Lab’s revenues anyway, the fact that management is taking a few extra months — or even as long as a year — to ensure everything goes smoothly won’t affect Rocket Lab’s revenues or profits much in the near term.
And longer term? As Beck explained, Rocket Lab is “building the program’s long-term infrastructure at the same time as we build our first rocket, so that we can scale quickly” once all the kinks are worked out. “We won’t rush to the pad with unnecessary risk,” he said.
Frustrating as the delay may be, this sounds like the right approach to me. Plus, as I’ve explained before, it won’t change the fact that Rocket Lab will almost certainly earn its first profit next year, with or without a Neutron launch.
“Long” story short, both near-term and long-term, I think Rocket Lab’s going to do just fine.
