Rocket Lab has now cleared its May 20 earnings hurdle with the stock up 8% on the week, shorts continuing to exit, and options hedging easing back from the defensive peak struck just before the print.
The short-covering story has accelerated since last week's note. Short interest has fallen 10% over the past five sessions to 5.5% of the free float — down from 6.4% in early May when shorts were still building. That is roughly 4.5 million shares unwound in under three weeks, continuing the pattern established after the Q1 print. The ORTEX short score has dropped from 43.5 on May 8 to 38.4 today, a meaningful drift lower that reflects the combined effect of rising price and declining short positions. Borrow conditions are extremely loose. Cost to borrow is just 0.45%, and availability has ballooned to over 1,300% — meaning there are roughly thirteen shares available in the lending pool for every one already borrowed. That is well above the 52-week low of 82% and speaks to a borrow market with no stress whatsoever. Shorts covering here are not doing so because the borrow is expensive or scarce; they are doing so because the trade has moved sharply against them.
Options positioning has pulled back from the elevated caution seen heading into earnings. The put/call ratio has retreated to 0.75, slightly below its 20-day average of 0.78 and roughly 0.8 standard deviations under that average. Two weeks ago the ratio touched 0.85 — the highest reading of the past year — as traders hedged aggressively ahead of the print. That defensive peak has now unwound. The options market is marginally more call-tilted than its recent norm, a quiet shift that aligns with the post-earnings short covering.
The valuation picture is uncomfortable but not unusual for a pre-profit growth story. The price-to-book has expanded to roughly 43x, up about 10 points over the past month on the back of a 50% price gain. The EV/EBITDA ratio is a figure best held loosely — at nearly 7,800x it reflects losses rather than a meaningful multiple — and the PE is deeply negative. The company ranks in the 92nd percentile on EPS surprise, and a forward EPS growth estimate of several thousand percent (from a small negative base) keeps the growth narrative intact, but the quality deficit highlighted in recent ORTEX score analysis remains. Growth at 77 and momentum scores strong; quality and value scores are anchors. The stock is priced for a roadmap, not a current earnings stream.
The institutional picture supports the idea that this is still a long-term conviction hold for the largest shareholders. Vanguard added 6.1 million shares last quarter, BlackRock added 4.9 million, and State Street and Geode both added meaningfully into the April period. That buying pattern preceded the May rally. D.E. Shaw, by contrast, trimmed 2.5 million shares in Q1 — the only notable seller among the top holders. On the insider side, Director Alexander Slusky's $11.8 million sale on May 12 remains the most significant recent signal; no insider has bought since. Net insider selling over 90 days runs to roughly $24.6 million — a one-way flow that has been absorbed by the institutional bid without disruption.
Among peers, VOYG jumped 29% on the week and RDW gained 20%, both outpacing RKLB's 8%. LUNR and FLY tracked closer, each up around 1-8%. The space-tech cohort remains broadly bid. What to watch now is whether short interest continues its descent toward the 5% level or stabilises, and whether the options market returns to neutral or begins pricing the next catalyst — with no confirmed next earnings date yet in the calendar.
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