The above button links to Coinbase. Yahoo Finance is not a broker-dealer or investment adviser and does not offer securities or cryptocurrencies for sale or facilitate trading. Coinbase pays us for certain activity generated through this link. Prices displayed are informational.

Rocket Lab (NASDAQ: RKLB) has climbed from around $21 per share to more than $73 over the past year, or just shy of a 250% increase. For investors who caught the wave, it's been an extraordinary ride. But the question now is whether Rocket Lab deserves a permanent spot in your portfolio -- the kind of stock you buy on every dip and never sell.

The company posted record revenue of $602 million in 2025, up 38% year over year, with its backlog surging 73% to almost $1.9 billion. Take a look at its incredible sales growth over the past few years:

Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »

The company is executing, flying 21 missions last year with a 100% success rate. That helped it land a $816 million contract from the Space Development Agency. And its space systems segment -- satellites and other spacecraft -- has grown to roughly 67% of revenue. Rocket Lab has positioned itself as an end-to-end company for all things space.

Its most important growth driver has yet to hit the market. Neutron, its upcoming medium-lift rocket, will allow Rocket Lab to directly compete with SpaceX's bread-and-butter rocket, Falcon 9, at a price point that works out to roughly $15 million less per launch.

Of course, there are some real risks for investors. The stock run-up means that shares are now trading at about 66 times sales. That is pricey -- especially considering that Rocket Lab is still operating in the red. The company lost nearly $200 million on its $602 million in sales. This is moving in the right direction, however -- margins are improving -- and the successful rollout of Neutron could meaningfully shift the calculus.

But that isn't guaranteed. We're talking about space flight here; a lot can go wrong. And if Neutron's launch continues to be pushed off -- or worse, the rocket proves to be less than reliable -- Rocket Lab could be in serious trouble. Its $1.9 billion backlog might not convert to actual revenue.

The stock's price tag means that a lot of future success has already been baked in. Still, the opportunity is huge. Elon Musk's SpaceX is planning an IPO at a valuation of roughly $2 trillion. With a market capitalization of about $40 billion, Rocket Lab has a lot of room to grow into its valuation if it succeeds.

Rocket Lab is clearly a well-run company in an exciting market with a lot of opportunities ahead. Is it a buy-and-never-sell type of stock?

I think that depends on what kind of investor you are. If you have an appetite for risk and can stomach paying such a hefty premium, Rocket Lab absolutely could be. For most people, it's too risky, and the stock is too expensive to become a sizable position in a portfolio.

Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.

On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:

Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $523,131!*

Apple: if you invested $1,000 when we doubled down in 2008, you’d have $51,457!*

Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $524,786!*

Right now, we’re issuing “Double Down” alerts for three incredible companies, available when you join Stock Advisor, and there may not be another chance like this anytime soon.

See the 3 stocks »

*Stock Advisor returns as of April 13, 2026

Johnny Rice 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.

Rocket Lab Is Up Nearly 250% in a Year. Is This the 1 Space Stock You Buy on Every Dip and Never Sell? was originally published by The Motley Fool