RKLB Stock Today: January 17 Morgan Stanley Upgrade Sparks 6% Jump
RKLB stock rallied about 6% on January 17 after a Morgan Stanley upgrade to Overweight and a higher Rocket Lab price target of US$105 from US$67. Shares of RKLB traded near US$96.30 as the call cited the US$816 million SDA Tranche 3 Tracking Layer award and strong revenue momentum. For Canadians, this move highlights growing defense exposure and contract visibility. We break down the drivers, valuation setup, technical picture, and practical steps to consider when trading a U.S.-listed name from Canada.
Why shares rallied on January 17
Morgan Stanley raised RKLB stock to Overweight and lifted its Rocket Lab price target to US$105 from US$67, noting the US$816 million SDA Tranche 3 award and 52% revenue growth cited in its thesis. The upgrade added conviction to the defense backlog story and sparked a 6% pop. See coverage highlights here: Rocket Lab Stock Jumps on Morgan Stanley Massive Upgrade.
The SDA Tranche 3 Tracking Layer win strengthens visibility in space systems, a higher-margin, recurring revenue lane that can smooth launch cyclicality. Industry analysis argues Rocket Lab has moved into a bigger competitive set with defense programs and spacecraft platforms supporting multi-year growth. For deeper context, see Rocket Lab Enters A Different League (NASDAQ:RKLB).
Management has highlighted rising demand across launch and space systems. Morgan Stanley referenced 52% revenue growth, while trailing data show revenue growth of 78.3435% year over year. The SDA Tranche 3 award underpins backlog and mix shift toward defense. For Canadians, the appeal is exposure to a U.S. defense-driven space supplier with growing contract scope and potential operating leverage over time.
Valuation, risks, and what to watch
RKLB stock trades at a price-to-sales ratio TTM of 90.7308 and price-to-book of 40.4824 with EPS of -0.38 and a net profit margin TTM of -0.3564. Market cap sits at US$49,400,294,294. Free cash flow per share TTM is -0.43796. These figures show a growth premium that requires continued contract wins and margin progress to be sustainable.
The upgrade boosts sentiment, but the near term can still be choppy. Recent insider selling, plus a rich valuation and negative margins, may cap upside moves if execution slips. Watch launch cadence, spacecraft deliveries, and any delays in Neutron development. Contract concentration and timing risk also matter when large defense milestones drive quarter-to-quarter optics.
Next earnings is scheduled for February 26, 2026. Focus on backlog updates tied to SDA Tranche 3, space systems margin trends, and launch schedule visibility. Analyst coverage lists 12 Buys and 3 Holds. Any new defense awards, Neutron test milestones, or step-ups in government program scope could influence RKLB stock and its path toward scale economics.
Technical picture after the pop
Momentum strengthened. RSI sits at 69.48 and Money Flow Index at 87.65, both near or in overbought territory. ADX at 38.93 signals a strong trend. MACD remains positive with a 1.27 histogram. This setup supports trend-followers but tells short-term traders to expect faster swings as momentum cools or consolidates.
Price is US$96.30, with the day high and year high at 99.58 and day low at 92.40. The 50-day average is 60.1419, well below spot, showing an extended move. Price is above the Bollinger upper band at 89.61, a stretched reading that often precedes sideways action or a pullback toward recent support zones.
RKLB stock trades in U.S. dollars on Nasdaq. Consider FX costs, U.S. dollar funding, and position sizing in a TFSA or RRSP. The ATR is 5.98, useful for setting stops; many traders place risk limits near 1 to 1.5 times ATR. The company pays no dividend, so there is currently no U.S. withholding tax impact.
How Canadian investors can position
We view RKLB stock as a high-beta growth holding tied to space and defense. For diversified Canadian portfolios, a small satellite position can add thematic exposure without overpowering core TSX holdings. Pairing it with cash or bonds may help manage volatility while you track contract execution and margin expansion milestones.
After a 6% jump, patience can help. Consider scaling entries and using ATR of 5.98 to plan position risk. Potential support sits near US$92.40 to US$90.76. A decisive close above US$99.58 could extend momentum. Avoid chasing size at highs; define risk first, then add on constructive pullbacks.
Forecasts point to modeled prices of US$129.8773 in 3 years and US$201.3015 in 5 years, with execution as the swing factor. Margins remain negative, so watch operating leverage in space systems and Neutron progress. Revisit the thesis each quarter and reassess position size if contract timing or profitability slips.
Final Thoughts
RKLB stock got a clear vote of confidence on January 17 with a Morgan Stanley upgrade to Overweight and a new US$105 target, supported by the US$816 million SDA Tranche 3 award. The defense backlog narrative is gaining traction, but the valuation is rich with negative margins and stretched technicals. For Canadian investors, focus on contract flow, margin trends, and launch cadence into the February 26, 2026 earnings date. Use defined risk, scale in rather than chase, and factor FX costs when trading a U.S.-listed name. If execution continues and space systems margins improve, the upside case strengthens. If not, keep exposure modest and reassess quickly.
FAQs
Why did RKLB stock jump today?
Morgan Stanley upgraded RKLB stock to Overweight and raised its target to US$105 from US$67, citing the US$816 million SDA Tranche 3 award and strong growth. The call reinforced the defense backlog thesis, helping shares rise about 6% on January 17 as investors priced in better contract visibility and potential operating leverage ahead.
What is Morgan Stanley’s new Rocket Lab price target?
Morgan Stanley set a new Rocket Lab price target of US$105, up from US$67, alongside an upgrade to Overweight. The firm highlighted the SDA Tranche 3 Tracking Layer contract and improving growth trends as key drivers for the higher target. Investors should monitor backlog conversion, margins, and launch cadence to validate the case.
Is RKLB stock a buy for Canadian investors?
RKLB stock offers growth exposure to space and defense, but trades at high multiples with negative earnings. Consider a small position size, scale entries, and manage FX costs. Watch the February 26, 2026 earnings, space systems margins, and Neutron updates. If execution stays strong, add on dips; if not, keep exposure modest.
What are the key risks to RKLB stock now?
Main risks include rich valuation, negative margins, and execution around launch cadence and spacecraft deliveries. Contract timing can add volatility. Insider selling and macro shifts in defense budgets could weigh on sentiment. Technicals are stretched, so a pullback toward support is possible if momentum fades after the post-upgrade surge.
Disclaimer:
The content shared by Meyka AI PTY LTD is solely for research and informational purposes. Meyka is not a financial advisory service, and the information provided should not be considered investment or trading advice.
