Rocket Lab’s $135 Bull Case Now Runs Through a Delayed Neutron

Rocket Lab’s most bullish analyst target implies more than 140% upside, but the central assumption behind it has weakened. Neutron, the reusable medium-lift rocket meant to expand Rocket Lab beyond Electron, will not make its first flight in 2026.

The company’s October 14 update moved the inaugural launch into 2027 after manufacturing issues affected the first-stage structures and propellant tank domes. It was the second major delay after a stage-one tank test failure shifted the earlier schedule to the fourth quarter of 2026.

The bull case still has evidence behind it. Second-quarter revenue rose 62% to $234.1 million, and backlog reached a record $2.36 billion. Rocket Lab said it secured more than $437 million of launch contracts during and after the quarter, with more than 90 launches in backlog. Those commitments show demand, but they do not remove schedule risk.

Cash flow makes the timing important. Management has tied the expected inflection toward positive free cash flow to a successful Neutron test launch, followed by an estimated 18 to 24 months to reach positive cash flow on a standalone basis. A later launch pushes that timetable out and can increase the need for outside capital.

KeyBanc’s $135 target rests on Neutron becoming a credible alternative in medium-lift launches, expansion in higher-margin space systems and contracted demand. The next proof point is not another target price. It is successful structural testing, delivery to the launch site and a 2027 flight date that stops moving.