Rocket Lab has extended its post-earnings rally into a second week, with short sellers continuing to exit and the stock now up 80% over the past month — a move that has left the remaining bears increasingly exposed.
The short-covering trend is still running. Short interest has dropped to 5.4% of the free float, the lowest reading in at least five weeks and down from a peak above 6.4% in early May. That is roughly 5.3 million shares covered since May 8, a relentless one-way flow that accelerated after the Q1 earnings beat and has barely paused since. The ORTEX short score has drifted lower again this week, to 37.7 from 38.4 at the last note — not dramatic in isolation, but consistent with a position that continues to deflate. The borrow market tells an identical story: cost to borrow is just 0.44%, down slightly on the week, and availability has widened further to 1,433% — nearly fourteen shares available in the lending pool for every one borrowed, well above the 52-week low of 82%. Shorts leaving here face no friction whatsoever; borrow is cheap and plentiful. They are covering because the trade is losing money, not because they are being squeezed out by supply.
Options have settled back to neutral after the defensive peak into earnings. The put/call ratio is 0.78, fractionally below its 20-day average of 0.78 and nowhere near the 0.85 registered on May 14 when hedging demand was at its annual high. The z-score of -0.18 is effectively flat — this is neither a bullish tilt nor a defensive one. The options market, having priced caution ahead of the print, has exhaled.
The Street is catching up to a stock that has materially re-rated. The price-to-book multiple has expanded by roughly 37% over the past 30 days to 48x, while EV/EBITDA — already at astronomical levels given Rocket Lab is still loss-making — has moved less dramatically. A negative P/E and deeply negative earnings yield are the expected arithmetic for a pre-profitability aerospace name trading on execution potential. The EPS surprise factor score ranks in the 92nd percentile, the strongest signal in the factor deck, and reflects a company that has consistently beaten expectations even while running losses. That combination — high beats, no profits — captures the bull/bear debate precisely. Bears point to a $82 billion enterprise value on a company still burning cash; bulls point to the Neutron program pipeline, a government contract backlog, and a launch cadence that SpaceX's focus on larger payloads leaves largely uncontested in the small-launch segment.
Institutional flows are broadly constructive. BlackRock added nearly 4.9 million shares in the period to April 30, lifting its stake to 6.6%. Vanguard entities together hold over 8.6% and both reported new or significantly increased positions. D.E. Shaw trimmed by 2.5 million shares in Q1, a notable reduction by one of the more technically-oriented holders — though that was at prices well below current levels. The insider picture from the previous notes remains unchanged: Director Alexander Slusky's $11.8 million sale at $115–$120 in mid-May still stands as the most recent signal, and the stock has since traded through those levels by a wide margin.
Among peers, RDW surged 57.9% on the week and FLY added 33.8%, making this a genuine sector-wide momentum week rather than a stock-specific story. LUNR was the notable laggard, falling 8.9% on the day even as the group held gains. VOYG added 21% on the week. The breadth of the move across space and defense names adds some macro tailwind context to RKLB's own 12.5% weekly gain, though Rocket Lab's 80% monthly move still outpaces its peer group significantly.
The next scheduled catalyst is Q2 earnings on August 6. Between now and then, the stock's trajectory will likely hinge on Neutron development updates, Electron launch frequency, and whether institutional buyers continue to absorb what is now a considerably larger market cap than existed when most of the current short positions were first put on.
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