Rocket Lab $RKLB expands missile warning with Geost EO/IR acquisition, boosting FY25 revenue to $450M

Rocket Lab Corporation has significantly bolstered its position in the defence and space sectors through a strategic acquisition that integrates advanced electro-optical and infrared (EO/IR) payloads into its portfolio. This move enhances the company’s ability to deliver comprehensive mission solutions, particularly in areas such as missile warning, tracking, and space domain awareness, which are increasingly critical amid rising geopolitical tensions and the proliferation of hypersonic threats.

Expanding Capabilities in a High-Stakes Market

The acquisition of Geost, a specialist in EO/IR sensor systems, marks a pivotal expansion for Rocket Lab. By incorporating these sophisticated payloads, the company now offers end-to-end services that span launch vehicles, spacecraft design, and now advanced sensing technologies. This integration is timely, as global defence budgets prioritise resilient space-based systems to counter emerging threats like hypersonic missiles, which travel at speeds exceeding Mach 5 and pose challenges to traditional detection methods.

EO/IR payloads are essential for providing real-time data on missile launches, trajectories, and space objects. They enable early warning systems that can detect heat signatures from afar, facilitating rapid response in contested environments. For investors, this development underscores Rocket Lab’s evolution from a launch-focused entity to a full-spectrum space systems provider, potentially unlocking new revenue streams from government contracts, particularly with the US Department of Defense and allied agencies.

Strategic Implications for Defence and Commercial Applications

In the defence realm, the enhanced payloads align with initiatives like the US Space Force’s Next Generation Overhead Persistent Infrared (Next Gen OPIR) programme, which aims to modernise missile warning capabilities. Rocket Lab’s prior involvement in supplying solar power components for such systems, as noted in historical announcements from 2022, positions it well to deepen its footprint. The acquisition allows for seamless integration of payloads with Rocket Lab’s Electron rocket and Photon spacecraft, reducing dependency on third-party suppliers and potentially lowering costs for clients.

Beyond defence, these technologies have commercial upside in space domain awareness (SDA), which involves monitoring orbital debris, satellite manoeuvres, and potential collisions. With over 3,000 satellites launched in the past five years alone, according to industry estimates, the need for precise tracking has surged. Rocket Lab’s expanded toolkit could capture a share of the growing SDA market, projected by analysts at Morgan Stanley to reach $10 billion annually by 2030, driven by both public and private sector demand.

Financial and Market Context

As of 12 August 2025, Rocket Lab’s shares (Nasdaq: RKLB) traded at $45.02, reflecting a 0.73% increase from the previous close of $44.69. The stock has shown remarkable resilience, with a 52-week range from $5.03 to $53.44, indicating a 760.80% rise from its low. Volume on this date reached 24,813,478 shares, above the 10-day average of 17,730,750, suggesting heightened investor interest.

The company’s market capitalisation stands at $21.58 billion, with 479.36 million shares outstanding. Valuation metrics reveal a forward price-to-earnings ratio of -195.74, based on expected earnings per share of -0.23, highlighting the growth-oriented nature of the stock amid current losses. The price-to-book ratio of 31.35, against a book value of 1.44, points to market optimism about future prospects, particularly in high-margin defence contracts.

Recent quarterly results, reported in early August 2025, showed revenue growth of 36% year-over-year, fuelled by launch services and satellite operations. Analysts from firms like TipRanks have raised price targets post-earnings, with an average rating of 1.8 (Buy), reflecting positive sentiment. For instance, top-rated analysts cited the company’s expanding backlog and integration milestones, such as the System Integration Review for the US Space Force’s VICTUS HAZE mission, as bullish indicators.

Analyst Forecasts and Risks

Looking ahead, analyst models from sources like Yahoo Finance project Rocket Lab’s revenue to climb to $450 million in fiscal 2025, up from $300 million in 2024, with the EO/IR segment contributing an estimated 15-20% through new contracts. A discounted cash flow model, assuming a 10% discount rate and 25% annual growth over five years, suggests a fair value range of $50-60 per share, contingent on successful payload integration and contract wins.

However, risks abound. The defence sector’s reliance on government funding makes it vulnerable to budget cuts, while technical challenges in scaling EO/IR production could delay timelines. Competition from established players like Lockheed Martin and Northrop Grumman remains fierce, though Rocket Lab’s agility as a smaller, innovative firm could provide an edge in responsive space operations.

Broader Industry Trends

The push for advanced payloads fits into a larger trend of proliferated low-Earth orbit (LEO) constellations for persistent surveillance. Programmes like the Space Development Agency’s tracking layer, which Rocket Lab supports through satellite builds, emphasise distributed sensors over monolithic systems. This shift, accelerated by events such as the Ukraine conflict, highlights the strategic value of space-based assets in modern warfare.

Investor sentiment, as gauged from credible sources like MarketBeat, remains bullish, with 70% of analysts rating the stock as a buy. Dry humour aside, one might say Rocket Lab is rocketing ahead, but only if it navigates the orbital debris of regulatory hurdles and supply chain issues.

Comparative Analysis

This table illustrates Rocket Lab’s outlier status in growth metrics, underscoring its potential as a disruptor despite negative earnings.

Investment Considerations

For long-term investors, the acquisition represents a compelling entry point into the burgeoning space defence market. With the US allocating over $30 billion to space programmes in fiscal 2025, companies like Rocket Lab stand to benefit. Diversification into payloads mitigates risks associated with launch cadence variability, while enhancing margins through vertical integration.

In summary, Rocket Lab’s foray into EO/IR payloads strengthens its competitive moat, aligning with global demands for advanced missile warning and SDA. While execution risks persist, the strategic fit and market tailwinds suggest substantial upside for patient shareholders.

References

• Rocket Lab Corporation. (2025). Rocket Lab closes acquisition of Geost. Retrieved from https://rocketlabcorp.com/updates/rocket-lab-closes-acquisition-of-geost-expanding-its-national-security-capabilities-with-launch-spacecraft-and-now-payloads/
• TechCrunch. (2025, August 7). Rocket Lab eyes big defense opportunities with new acquisition. Retrieved from https://techcrunch.com/2025/08/07/rocket-lab-eyes-big-defense-opportunities-with-new-acquisition/
• Defence Industry Europe. (2025). Rocket Lab to acquire Geost. Retrieved from https://defence-industry.eu/rocket-lab-to-acquire-geost-expanding-capabilities-in-missile-defence-and-space-payloads/
• Electronics Weekly. (2025, June). Rocket Lab buys Geost for EO/IR payloads. Retrieved from https://www.electronicsweekly.com/news/business/rocket-lab-buys-geost-for-electro-optical-and-infrared-payloads-2025-06/
• Lightridge Solutions. (2025). Rocket Lab enters payload market with agreement to acquire Geost. Retrieved from https://www.lightridgesolutions.com/rocket-lab-enters-payload-market-with-agreement-to-acquire-geost-positioning-itself-as-disruptive-prime-to-u-s-national-security/
• Wikipedia. (2025). Rocket Lab. Retrieved from https://en.wikipedia.org/wiki/Rocket_Lab
• GovConWire. (2025). Rocket Lab to acquire Geost expansion in satellite payloads. Retrieved from https://www.govconwire.com/articles/rocket-lab-acquire-geost-satellite-payload-market
• Cyprus Shipping News. (2025, August 12). Rocket Lab clears integration milestone for VICTUS HAZE. Retrieved from https://cyprusshippingnews.com/2025/08/12/rocket-lab-clears-integration-milestone-for-victus-haze-delivering-end-to-end-capabilities-for-responsive-space-operations/
• TipRanks. (2025). Top analysts boost price targets on Rocket Lab stock. Retrieved from https://www.tipranks.com/news/top-analysts-boost-price-targets-on-rocket-lab-stock-rklb-post-q2-earnings
• AOL Finance. (2025). Meet the monster stock that continues to crush the market. Retrieved from https://www.aol.com/finance/meet-monster-stock-continues-crush-154035160.html
• MSN Finance. (2025). Meet the monster stock that continues to crush the market. Retrieved from https://www.msn.com/en-us/money/topstocks/meet-the-monster-stock-that-continues-to-crush-the-market/ar-AA1KjM6y?ocid=finance-verthp-feeds
• Orbital Today. (2025, August 10). Rocket Lab VICTUS HAZE successfully integrated. Retrieved from https://orbitaltoday.com/2025/08/10/rocket-lab-victus-haze-successfully-integrated/
• MarketBeat. (2025). Rocket Lab reports Q2 results. Retrieved from https://www.marketbeat.com/originals/rocket-lab-reports-q2-results-is-the-bull-thesis-still-intact/
• Yahoo Finance. (2025). Rocket Lab Corporation (RKLB) profile & forecasts. Retrieved from https://finance.yahoo.com/news/rocket-lab-corporation-nasdaq-rklb-141849518.html
• Various authors (2025). X platform posts retrieved from accounts including @RocketLab, @Mottbox, @Varun55484761, @idrwalerts.