Beware loaded questions with apparently easy answers.
Asked recently whether I think Rocket Lab(NASDAQ: RKLB) (which is already public) or SpaceX (which soon will be), “has more room to run,” my first instinct was to reply: “Well, obviously Rocket Lab has more room to run!”
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When SpaceX holds its initial public offering (IPO) two weeks from now, Elon Musk’s famous space company is expected to debut at a market capitalization as high as $2 trillion. Rocket Lab, in contrast, is worth less than $86 billion. Logically, therefore, Rocket Lab has “room” to grow more than 22 times in size before it even begins to approach SpaceX’s valuation.
But what if that’s the wrong way to look at this?
Image source: Getty Images.
Space is hard. Making money in space may be even harder.
A publicly traded stock since 2021, investors have had plenty of time already to digest the facts about Rocket Lab, and to get a handle on its valuation, its growth rate, and its potential to turn profitable. In contrast, privately held SpaceX has always been something of a mystery.
Thanks to SpaceX (finally) unveiling its IPO prospectus last week, it’s finally possible for investors to make a clear side-by-side comparison of these two rocket stocks. So let’s do that.
Here are a few numbers from Rocket Lab, provided by our good friends at S&P Global Market Intelligence — alongside a few corresponding numbers about SpaceX, calculated from information contained in its prospectus.
Metric
Rocket Lab
SpaceX
Market capitalization
$85.7 billion
$2 trillion*
2025 revenue
$602 million
$18.7 billion
2025 net profit (loss)
($198 million)
($4.9 billion)
2024-2025 revenue growth
38.1%
33.5%
2025 free cash flow (burn)
($322 million)
($14 billion)
Data sources: S&P Global Market Intelligence, SpaceX S-1 filing (prospectus). *Estimated.
Viewed from this angle, it’s hard to make the case for buying either Rocket Lab or SpaceX. Both companies are losing money; both are burning even more cash than their income statements suggest. Clearly, while both companies are also doing a great job growing sales, they’re experiencing difficulty turning those sales into profits.
Two expensive space stocks — but one costs more than the other
Still, relatively speaking, I’d have to give the advantage here to SpaceX over Rocket Lab.
Why? True, Rocket Lab’s growing revenue a bit faster than SpaceX’s, but not that much faster. Considering that SpaceX stock is (or soon will be) trading for 107 times 2025 sales, while Rocket Lab costs a much more expensive 142 times sales, SpaceX actually appears to be the better bargain.
(I can’t believe I’m saying that about a stock with a purported $2 trillion market cap, but the math doesn’t lie.)
It’s also worth emphasizing how incredible it is to see SpaceX growing sales so quickly (again, even if not so quickly as Rocket Lab), given how large its revenue stream already is. Ordinarily, the “law of large numbers” makes it harder for big companies to maintain fast growth rates versus smaller companies growing off a smaller revenue base. SpaceX doesn’t seem to be having much trouble in this regard, however.
Gross profits — and the R&D they pay for
Strong, consistent investment in research and development to continuously improve its products may help to explain why SpaceX continues to grow so quickly.
Both Rocket Lab and SpaceX currently spend basically every dollar of gross profit they earn on research and development (R&D) (Rocket Lab to develop its Neutron rocket, and SpaceX its Starship megarocket). This is the main reason why neither company is yet profitable according to generally accepted accounting principles (GAAP), despite producing positive gross profit margins.
S&P Global data show that Rocket Lab achieved a respectable 34% gross margin last year, while the SpaceX prospectus shows Elon Musk’s space company grossing more than 50% on each revenue dollar. In 2025, SpaceX reinvested nearly all this gross profit in R&D, to the tune of $9.5 billion — 55% more than it spent on R&D in 2023.
Granted, Rocket Lab spends a lot on R&D, too — actually more than 100% of its gross profit! Still, as a much smaller company with much less money to work with, its total R&D spending for the year was just $271 million.
Looking just at the two companies’ market caps, it may seem like Rocket Lab has more room to run. Able to invest vastly greater sums in R&D, however, I have a hunch it’s SpaceX that’s going to run away with this race.
Should you buy stock in Rocket Lab right now?
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