Rocket Lab USA, Inc. (RKLB) saw its stock price plummet by 5.15% in pre-market trading on Friday, following the release of its first-quarter 2025 financial results. The space technology company reported mixed earnings, with revenue beating expectations but earnings per share (EPS) falling short of forecasts.

According to the earnings report, Rocket Lab posted a revenue of $122.6 million for Q1 2025, surpassing the anticipated $121.49 million and marking a 32.1% year-over-year increase. However, the company reported a loss of $0.12 per share, missing the forecasted loss of $0.10 per share. This earnings miss, coupled with after-hours trading reaction, appears to have triggered the stock's significant decline.

Despite the revenue growth and a strong backlog of $1.067 billion, investors seem concerned about Rocket Lab's path to profitability. The company's market capitalization of $10.4 billion and its impressive 463% stock return over the past year have led to questions about potential overvaluation. Analysts at InvestingPro suggest that the stock appears overvalued compared to its Fair Value, which may be contributing to the current sell-off. As Rocket Lab continues to balance growth with profitability, the market reaction highlights the challenges faced by rapidly expanding space technology companies in meeting investor expectations.