Rocket Lab (NASDAQ:RKLB) vs. Hexcel (NYSE:HXL) Financial Analysis

Rocket Lab (NASDAQ:RKLB) and Hexcel (NYSE:HXL) are both aerospace companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, profitability, valuation, risk, institutional ownership, earnings and analyst recommendations.

Profitability

This table compares Rocket Lab and Hexcel’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%
Hexcel	5.78%	9.54%	5.08%

Insider and Institutional Ownership

71.8% of Rocket Lab shares are owned by institutional investors. Comparatively, 95.5% of Hexcel shares are owned by institutional investors. 11.9% of Rocket Lab shares are owned by insiders. Comparatively, 2.0% of Hexcel shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Volatility and Risk

Rocket Lab has a beta of 2.16, meaning that its stock price is 116% more volatile than the S&P 500. Comparatively, Hexcel has a beta of 1.06, meaning that its stock price is 6% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings for Rocket Lab and Hexcel, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Rocket Lab	1	6	7	1	2.53
Hexcel	1	11	3	0	2.13

Rocket Lab currently has a consensus target price of $72.92, indicating a potential upside of 8.12%. Hexcel has a consensus target price of $82.17, indicating a potential downside of 8.54%. Given Rocket Lab’s stronger consensus rating and higher probable upside, equities analysts plainly believe Rocket Lab is more favorable than Hexcel.

Earnings & Valuation

This table compares Rocket Lab and Hexcel”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Rocket Lab	$436.21 million	82.58	-$190.18 million	($0.38)	-177.47
Hexcel	$1.89 billion	3.60	$109.40 million	$1.38	65.10

Hexcel has higher revenue and earnings than Rocket Lab. Rocket Lab is trading at a lower price-to-earnings ratio than Hexcel, indicating that it is currently the more affordable of the two stocks.

Summary

Hexcel beats Rocket Lab on 8 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 Hexcel

Hexcel Corporation develops, manufactures, and markets carbon fibers, structural reinforcements, honeycomb structures, resins, and composite materials and parts for use in commercial aerospace, space and defense, and industrial applications. It operates through two segments, Composite Materials and Engineered Products. The Composite Materials segment manufactures and markets fabrics, multi-axials, specialty reinforcements, prepregs and other fiber-reinforced matrix materials, structural adhesives, molding compounds, tooling materials, polyurethane systems, and laminates that are used in military and commercial aircraft, wind turbine blades, recreational products, and other industrial applications, as well as in automotive, marine, and rail transportation. The Engineered Products segment manufactures and markets aircraft structures and finished aircraft components, including wing to body fairings, wing panels, flight deck panels, door liners, rotorcraft blades, spars, and tip caps; and aircraft structural sub-components and semi-finished components used in rotorcraft blades, engine nacelles, and aircraft surfaces, such as flaps, wings, elevators, and fairings; and RF interference control products for military and aerospace applications. This segment also provides interference control materials, structural composites, and services; dielectric absorber foams; magnetic absorbers; and thermoplastics for commercial and defense applications. The company sells its products directly through its managers, product managers, and sales personnel, as well as through independent distributors in the Americas, Europe, the Asia Pacific, India, and Africa. Hexcel Corporation was founded in 1946 and is headquartered in Stamford, Connecticut.