Rocket Lab USA (RKLB 0.75%) was one of the many space stocks that went public by merging with a special purpose acquisition company (SPAC) in 2021. Many of those SPAC-backed start-ups fizzled out, yet Rocket Lab survived and thrived.

Over the past three years, Rocket Lab's stock has surged nearly 140% as it has launched more rockets, secured more contracts, and stabilized its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) margins.

So could a $10,000 investment in this high-growth stock could set you up for life over the next two decades?

Image source: Getty Images.

What does Rocket Lab USA do?

Rocket Lab's reusable orbital rocket, Electron, carries small payloads of up to 300 kilograms into space. It's been successfully launched 60 times, used to deploy 210 satellites, and operates from three dedicated launch pads. Its top customers include NASA, the U.S. Space Force, the Swedish National Space Agency, Capella Space, and Black Sky.

From 2021 to 2024, its annual revenue rose sevenfold, it ramped up its launches, and its adjusted EBITDA margins -- though negative -- improved.

Data source: Rocket Lab USA.

Rocket Lab carved out its high-growth niche by delivering smaller payloads than its larger rival SpaceX, which carries much heavier payloads of 22,800 kilograms (Falcon 9) to 63,800 kilograms (Falcon Heavy) into low-earth orbit (LEO).

However, Rocket Lab's next rocket, the Neutron, will have a much higher maximum capacity of 15,000 kilograms when it arrives in the second half of 2025. To stabilize its margins as it manufactures more rockets, it plans to expand its higher-margin space systems division to curb its dependence on its lower-margin launch services division.

What are Rocket Lab's near-term catalysts?

Rocket Lab still has plenty of irons in the fire. In 2024, it shipped two research satellites and was granted an additional study contract for NASA's next Mars mission; agreed to deploy a constellation of 25 satellites for Kinéis, a global Internet of Things (IoT) connectivity provider, through five Electron launches; and signed a multiyear Electron launch contract with Japan's Institute for Q-shu Pioneers of Space (iQPS). It also continues to make progress on several U.S. national defense contracts.

As for the upcoming Neutron rocket, it's already locked in two launches with a satellite network operator in 2026. NASA also added Neutron launches to its existing VADR (Venture-Class Acquisition of Dedicated and Rideshare) contract. In addition, it recently joined a team led by Kratos Defense & Security Solutions to test hypersonic flights. The potential value of that contract -- which will be split with its partners over a five-year period -- is $1.45 billion.

Rocket Lab doesn't expect to turn a profit this year, but it still had $419 million in cash, cash equivalents, and marketable securities at the end of 2024. That liquidity should support its upcoming Electron launches and the rollout of its Neutron rocket.

What's next for Rocket Lab?

From 2024 to 2027, analysts expect Rocket Lab's revenue to expand at a compound annual growth rate (CAGR) of 42% -- from $436 million to $1.24 billion. They expect its adjusted EBITDA to turn positive in 2026 and more than double to $151 million in 2027. They also expect its earnings to turn positive on a generally accepted accounting principles (GAAP) basis in 2027.

We should take that rosy outlook with a grain of salt, especially with the uncertain outlook for government spending under the Trump administration, but Rocket Lab seems well-poised to grow in the small- to medium-sized reusable orbital rockets market even as SpaceX dominates the market for heavier payloads.

With an enterprise value of $9.66 billion, its stock might seem pricey at 17 times this year's sales. But if we look further ahead, it looks more reasonably valued at 8 times its 2027 sales.

How much larger can Rocket Lab USA get?

If Rocket Lab matches analysts' expectations and continues to grow its top line at a robust CAGR of 20% over the following eight years, its annual revenue could rise to $5.35 billion by 2035. Assuming its business matures and it keeps growing at a CAGR of 15% from 2035 to 2045, that figure could rise to $21.7 billion.

If Rocket Lab is trading at 10 times sales by then, it would be worth $217 billion. That would represent a 22-bagger gain from its current enterprise value and turn a $10,000 investment into around $220,000. That would be an impressive 20-year gain, but it might not be enough to "set you up for life" on its own.

With that said, Rocket Lab could still be a good speculative play on the nascent reusable orbital rocket market for investors who can stomach a lot of near-term volatility.