Key Points
Rocket Lab just secured a big U.S. Space Force contract to deploy its “Flatellites”.
These stackable satellites could support its evolution into an end-to-end space company.
Rocket Lab(NASDAQ: RKLB), a developer of reusable orbital rockets, recently secured at $397 million contract from the U.S. Space Force to develop, launch, and operate multiple "Flatellites" for its Space-Based Airborne Moving Target Indicator (SB-AMTI) program. Let's see what this new technology does, and why it could generate long-term tailwinds for Rocket Lab's business.
What are Flatellites?
Flatellites are satellites that are flatter and more stackable than their conventional counterparts. Their slimmer profile enables Rocket Lab to deploy more of them per launch, and they can be seamlessly integrated into the company's upcoming Neutron rocket.
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Image source: Rocket Lab.
Rocket Lab introduced Flatellites last February, but it hasn't produced any of those next-gen satellites yet. But it's been acquiring smaller companies and developing its own components to support the expansion of that vertically integrated satellite manufacturing business.
Rocket Lab believes that approach will enable it to produce high volumes of Flatellites "without compromising performance or reliability". It also expects more of its customers to use Flatellites to rapidly deploy their own low Earth orbit (LEO) satellite constellations. According to Grand View Research, the LEO market could expand at a 14% CAGR from 2025 to 2033 as more private space companies and national space agencies launch those satellites to upgrade their communication and surveillance capabilities.
How could the U.S. Space Force contract help Rocket Lab?
Rocket Lab currently generates most of its revenue from its Electron orbital rocket, which it has successfully launched 92 times to deploy more than 263 satellites. The Electron carries much smaller payloads than SpaceX's (NASDAQ: SPCX) Falcon rockets, but the Neutron -- which is expected to arrive by the end of 2026 -- will carry much larger payloads.
With Flatellites, Rocket Lab can provide an end-to-end service for the production and deployment of LEO satellites. Its new contract with the U.S. Space Force further expands its portfolio of U.S. government and defense programs, which include missions for NASA, DARPA, and the National Reconnaissance Office. It also complements its plans to expand into an "end-to-end" space company that produces more spacecraft, satellites, and subsystems.
Is Rocket Lab still a solid investment?
From 2025 to 2028, analysts expect Rocket Lab's revenue to surge from $602 million to $1.7 billion. They also expect it to turn profitable by the final year.
Rocket Lab's stock isn't cheap at 27 times its 2028 sales. Still, investors should keep an eye on its new technologies -- including its Flatellites and "Hungry Hippo" payload fairing technology -- to see if the company can keep pace with SpaceX in the nascent space logistics market.
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Leo Sun has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Rocket Lab. The Motley Fool has a disclosure policy.
