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Famed stock market investor Michael Burry is sounding the alarm again. The self-styled ‘Cassandra’ recently wrote this on X: “The stock market is quite obviously in its first stage of grief, denial. Per 2000 and 2008, this stage lasts 6-9 months“.
Thankfully, I’m not trying to correctly call market meltdowns. As fund manager Peter Lynch famously observed: “Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in the corrections themselves“.
That said, the stock market does occasionally crash, so one can’t be ruled out within the next 12 months. Rather than panic though, I’d use it as an opportunity to invest in some of my favourite stocks at lower prices, including this one…
Bulging backlog
The name in question is Rocket Lab (NASDAQ:RKLB), a company that launches rockets and develops satellites and spacecraft technology. Frustratingly, I watched the stock soar from a few dollars in 2024 all the way to $150 in May this year.
Since then though, Rocket Lab has slumped by 56% to $65. So I’m more interested now — and would be even more if it crashed further.
Why? Well, the company’s on course to complete 100 successful launches of its Electron rocket. This cements Electron as the world’s most frequently-launched small-lift orbital rocket. So the firm has well-proven technology.
This year, Rocket Lab’s revenue is expected to grow about 60%, to just under $1bn. By 2028, this should double to almost $2bn, driven higher by a record launch backlog of over 100 missions.
Note that the company recently announced its single largest commercial launch contract to date. This involves 20 Electron missions between 2028 and 2031 for Tokyo-based Earth observation company Synspective.
Now, in a bid to compete with SpaceX‘s Falcon 9 for more lucrative contracts, the firm is developing a larger rocket called Neutron. However, this hasn’t been tested yet, meaning there’s a risk that it explodes and the schedule gets pushed back.
What’s interesting though is that SpaceX is moving to restrict third-party commercial launches as it focuses on building out its own Starlink service and orbital AI infrastructure. This reprioritisation is expected to take place from 2028 onwards.
Needless to say, this creates a huge opportunity for Rocket Lab to fill the vacuum. And this could meaningfully accelerate the company’s growth, assuming Neutron is operating by then.
Rocket Lab’s also a critical supplier of spacecraft components for NASA’s Artemis mission to return humans to the Moon. So it’s at the centre of the booming global space industry.
Dip-buying strategy
When [satellite] constellation builders want control over their destiny, they come to Rocket Lab.
Founder and CEO Sir Peter Beck.
Despite my obvious bullishness, I’ll point out that this is an expensive stock. Based on current forecasts for 2027, the forward-looking price-to-sales ratio is 28.
Plus, the company isn’t expected to turn profitable until 2027/28. So I class this as a higher-risk growth share.
My strategy then, which adventurous investors could also consider, is to buy on dips (and especially crashes) over the next 18 months to fill out my position. Because I believe the company’s best days are to come over the next decade.
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Ben McPoland owns shares in SpaceX.
This story originally appeared on Motley Fool
