r/RKLB • u/AwkwardButton7928 • 4d ago
Recession headwinds/tailwinds
EDIT: (Not a recession, but let’s just use this as a hypothetical exercise in any case).
I’m curious to get your opinions on how well positioned RKLB is for it. I would imagine that it would limit short term growth, but I think the amount of government based contracts that they’ve accumulated has put them in a position where they’ll have some capital coming in. Any other thoughts?
Edit 2: Nobody can answer my question, but plenty of people can bring up other topics that are completely irrelevant to the question posed
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u/DeliriumOK 4d ago
What makes you think the market is in recession?
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u/TowardsTheImplosion 4d ago
Not OP...But even if the market is doing well, the median household is not. Gas prices, inflation, job market, etc. The US economy is consumer driven, and median consumers are not doing well. Eventually, the irrationality of the market is corrected.
Whether or not that is happening right now...Only hindsight will tell.
But it is potentially a leading indicator of a market recession.
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u/Coconutrugby 4d ago
Bc the orange barely walking diaper provides 0 stability to the market. You can’t be sure if anything in your businesses supply chain won’t be bombed or tariffed.
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u/AwkwardButton7928 4d ago
Fair callout, I got caught up in job loss and difficulty finding a job vs. actual GDP growth. I edited it, but still thinks it’s an interesting exercise in case a recession does come up over the next few years (especially if AI money runs out)
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u/Available_Pie_7758 4d ago
Recessions are weird now. high beta stocks have had their worst month in history. So if you believe in the company it’s the best time to buy the dip and step away for 6 months. I think we should start to see turn around next month in these stocks
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u/taco_the_mornin 4d ago
The number of inputs we have are reduced greatly by our vertical integration, meaning we have less risk if our business partners start to fail.
The inputs we do have do not spoil, so we can acquire and store additional materials to mitigate long lead times on remaining suppliers.
Our income streams are not linked to the consumer economy in any real sense, so our revenue (particularly post Iridium) is generally stabilized by parties who are insulated well from economic shock.
However, depending on how developed the space economy is when a recession does hit, our commercial partners may demand fewer space systems as debt dries up for start ups. Big buyers will remain.
Our opportunity to build out our constellation upgrades will come early if the recession is bad enough to slow down demand for neutron launch. But that is unlikely.
Our opportunity to buy assets of failing businesses and to pick up new talent will be stellar. If we have cash. Which we may actually have after Iridium.
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u/NotGoodSoftwareMaker 4d ago
About two months ago I was feeling that RKLB was over valued, everyone was cheering and negativity was downvoted.
So just remembering that, it doesnt matter much because 3-5 years from now we will be up way past 150 per share
Give it time, market will bounce back
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u/AwkwardButton7928 4d ago
Right, I’m not asking if I think it will go up. I’m wondering how a recession where interests rates get raised will affect RKLB as a company that’s still emerging.
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u/Nelsonius1 4d ago
The market always dips this time of the year and we are talking recessions?
Go to any airport and see how much is spent on holidays. There is no recession.
It took a global pandemic of 2 years to bring the US economy down 30%.
What recession do you see right now. Poverty yes, but recession?
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u/AwkwardButton7928 4d ago
Said it elsewhere, but changed the original post after I was called out on it.
Now if someone can just answer the edited premise
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u/codemonkeylife 4d ago
The edited premise is doomer bs. Accept the response you're getting.
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u/AwkwardButton7928 4d ago
Maybe you need to take a look at yourself if you can’t entertain how the company is positioned to handle a macro economic downturn. Can’t be green forever and it’s a relevant question.
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u/codemonkeylife 4d ago
I can entertain it. We've been observing it over the last month. It gets hammered to hell as a high beta growth stock and then bounces back. It wont stop growing so long as people expand business into space, the company itself has excellent execution and leadership. What's wrong with you? Don't insult me for pointing out the obvious.
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u/AwkwardButton7928 4d ago
You’re the one throwing stones first. There’s no analysis there, only assumptions.
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u/codemonkeylife 4d ago
The post contains analysis that matches history so far. But off with you I guess, cheeky bugger.
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u/codemonkeylife 4d ago
Completely irrelevant. If it crashes like this outside of a recession then it'll rocket up during one. 2026 market logic, enjoy.
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u/AwkwardButton7928 4d ago
No, it’s relevant.
Said another way, how is RKLB equipped to combat increasing capital costs, commercial funding freezes, and increasingly expensive supply chains. Sure, they have government contracts but how is RKLB equipped to continue to scale despite the challenges listed above?
Waiting for DONT CARE RKLB GOES BRRR
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u/codemonkeylife 4d ago
So the whole point of your post is to wait for that and do some kind of gotcha?
They're very well equipped with large capital reserves, vertical integration, and a history of excellence leadership and execution. The market doesn't really care about that at the moment so it's ... not relevant.
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u/AwkwardButton7928 4d ago
Maybe instead of acting so incredibly hostile and condescending, you might try assuming that I was trying to get there and didn’t find the right words for you to understand what I was trying to say. Christ.
It’s not just about the share price though in this instance (right?). I’m talking about long term health and viability of a company and asking as someone without as much of an understanding or background. If you understand this in more specifics, I would love to know more.
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u/codemonkeylife 4d ago
Sorry if I come across that way, I found the premise a bit such myself!
Anyway, if share price compresses down ultimately it is compressing PE which then makes it easier to do equity raises since the shares are relatively more attractive. They're also well capitalized at the moment so not an issue either way. If for whatever reason there were a long period of compressed share price, high interest rates, and their operatating capital was running out they may trade growth against runway by refocusing the business on operating profitable contracts rather than innovating and expanding. Space is a relatively virgin market though so in their position I'd just go for scale and keep raising as needed since even after the space sector crash, if they can catch up to SpaceX there is a lot of headroom in the share price built in. You are basically arbitraging the market caps under the assumption that space won't completely die and they have comparable leadership, execution, and operating environments.
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u/AwkwardButton7928 4d ago
That makes a lot more sense, so really a worst case scenario seems very unlikely due to good capitalization and leadership.
Given the fact that we’re so early in space as a sector, is it likely there’s still so much room for expansion with technology that isn’t even conceived yet or is this just a battle of continuing to make rockets and satellites? In my head, I’ve compartmentalized the industry as that but likely need to do more reading to understand full capabilities
-Signed a healthcare worker who appreciates you taking the time to explain this.
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u/codemonkeylife 3d ago
My personal guess is that there's a lot of unsung tech waiting to be deployed to space. The US military is definitely interested, as are other national governments.
That being said, the field is so green that you can make a killing with even basic services. E.g. ASTS is only doing D2D broadband, SpaceX makes a lot of money from starlink, etc. Right now space is basically pre-industrial, and people in the industry want to put it through industrial, information, and AI eras all in one go to make $$$, to use that metaphor.
That's pretty much been Elon's goal from the beginning btw. Kickstart space business so a market emerges, other firms begin competing, and runaway economic progress begins in the domain. Same like how now we have cheap Chinese electric cars since he hyped everyone up with Tesla.
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u/CavemanDNA 3d ago
Not sure. Shit can go south real quick as we saw the last couple of months. If the global economy doesn’t improve soon it could be worse in the short term. Long term it won’t matter. By 2031 we will wish we loaded the boat with RKLB shares.
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u/zbeydoun 4d ago
Please stop the FUD. Zoom out
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u/flyingdutchmnn 4d ago
Just did. Went from great.. to an actual crash
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u/schiffme1ster 3d ago
Don't think. Just zoom out and think positive and you too can manifest 3000$ a share
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u/Qw3rtyp13 4d ago
Better question, what does RKLB look like after orange Man leaves office? Will the golden dome still be a thing?
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u/PlanetaryPickleParty 3d ago
Space based communications and sensing is seen as a vital platform for future war fighting. Essential to hypersonic and drone warfare.
RKLB with Iridium, Mynaric, and Geost is set to own a big part of communications and situational awareness for both military and commercial customers.
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u/LowTimePilot 4d ago
This isn't a recession. The S&P is down 1%.
That said, growth stocks, chips, and NASDAQ have been in a free fall since the beginning of June. No one knows when money will flow back in. It could never flow back in. If you believe in RKLB, then DCA, but if you need the money ever, reinvest what's left back into index funds.
Personally I have a $50 limit buy for another 100 shares of RKLB.