Rocket Lab (NASDAQ:RKLB – Get Free Report) and Loar (NYSE:LOAR – Get Free Report) are both aerospace companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, earnings, analyst recommendations, institutional ownership, risk, profitability and dividends.
Volatility & Risk
Rocket Lab has a beta of 2.2, suggesting that its stock price is 120% more volatile than the S&P 500. Comparatively, Loar has a beta of 0.35, suggesting that its stock price is 65% less volatile than the S&P 500.
Profitability
This table compares Rocket Lab and Loar’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Rocket Lab | -35.64% | -27.26% | -12.21% |
| Loar | 13.33% | 6.45% | 4.85% |
Analyst Recommendations
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Rocket Lab | 1 | 5 | 7 | 2 | 2.67 |
| Loar | 0 | 1 | 4 | 1 | 3.00 |
Rocket Lab presently has a consensus target price of $58.17, suggesting a potential downside of 5.40%. Loar has a consensus target price of $90.75, suggesting a potential upside of 29.80%. Given Loar’s stronger consensus rating and higher possible upside, analysts clearly believe Loar is more favorable than Rocket Lab.
Valuation and Earnings
This table compares Rocket Lab and Loar”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Rocket Lab | $436.21 million | 75.30 | -$190.18 million | ($0.38) | -161.82 |
| Loar | $402.82 million | 16.25 | $22.23 million | $0.66 | 105.93 |
Loar has lower revenue, but higher earnings than Rocket Lab. Rocket Lab is trading at a lower price-to-earnings ratio than Loar, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
71.8% of Rocket Lab shares are held by institutional investors. 11.9% of Rocket Lab shares are held by insiders. Comparatively, 22.6% of Loar shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
Summary
Loar beats Rocket Lab on 9 of the 15 factors compared between the two stocks.
About Rocket Lab
Rocket Lab USA, Inc., a space company, provides launch services and space systems solutions for the space and defense industries. The company provides launch services, spacecraft design services, spacecraft components, spacecraft manufacturing, and other spacecraft and on-orbit management solutions; and constellation management services, as well as designs and manufactures small and medium-class rockets. It also designs, manufactures, and sells Electron, a reusable orbital-class small rocket; and the Photon satellite platforms, as well as developing the Neutron 8-ton payload class launch vehicle; conducts remote launch activities; and designs and manufactures a range of components and subsystems for the Photon family of spacecraft and broader merchant spacecraft components. The company serves commercial, aerospace prime contractors, and government customers. Rocket Lab USA, Inc. was founded in 2006 and is headquartered in Long Beach, California.
About Loar
Loar Holdings Inc., through its subsidiaries, designs, manufactures, and markets aerospace and defense components for aircraft, and aerospace and defense systems in the United States and internationally. It offers products in various categories, which include airframe components, structural components, avionics, composites, braking system components, de-ice and ice protection, electro-mechanical, engineered materials, flight controls, fluid and motion controls, environmental, metal forming, molded components, and restraints and safety devices. The company also provides auto throttles, lap-belt airbags, two-and three-point seat belts, water purification systems, fire barriers, polyimide washers and bushings, latches, hold-open and tie rods, temperature and fluid sensors and switches, carbon and metallic brake discs, fluid and pneumatic-based ice protection, RAM air components, sealing solutions, actuation devices, and others. It primarily serves commercial, business jet and general aviation, and defense markets. Loar Holdings Inc. was founded in 2017 and is headquartered in White Plains, New York.
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