Rocket Lab rated Buy with 25% upside as margin growth and backlog boost confidence ahead of Q1 2026 results.

Rocket Lab remains a Buy with over 25% medium-term upside despite high valuation and sector volatility. Its Space Systems segment is driving margin expansion, with a projected Q4 2025 non-GAAP gross profit margin of 44.3% and a backlog increase of 73% year-over-year to $1.85 billion. Recent acquisitions like Mynaric and Geost enhance vertical integration and support execution on major government contracts. Upcoming Q1 2026 earnings will focus on Neutron rocket progress, margin trends, and backlog conversion, which are critical for maintaining investor confidence and valuation.