Key takeaways
- Redwire shares fell nearly 15% after Jefferies downgraded to Hold after the stock rose 163% in just 30 days.
- Rocket Lab stock fell more than 13% on Monday amid widespread selling pressure across space-related stocks
- SpaceX’s expected IPO in June could trigger a ‘sell-the-news’ reaction that pressures space sector valuations
- Sector valuations become sky-high, with AST SpaceMobile trading at 260 times expected 2026 revenues
- Technical indicators show that Rocket Lab is in overbought territory, with the Relative Strength Index at 80 and the Stochastic Oscillator above 90.
Space-related stocks saw big losses on Monday, with Rocket Lab, Redwire and Firefly Aerospace leading the decline. The sector-wide decline reflects growing investor concerns about inflated valuations as SpaceX’s highly anticipated initial public offering (IPO) approaches.
Redwire saw a roughly 15% decline after Jefferies analyst Sheila Cahyoglu changed her rating from buy to hold. While she increased her price target from $13 to $24, Cahayaoglu noted that significant upside potential appears limited at current levels. This contraction follows an extraordinary 163% rise over the previous 30-day period.
Rocket laboratory It fell more than 13% during the same trading session. The company’s shares are up more than 4,000% from pandemic-era lows and recently touched record highs, though technical analysis tools are now signaling caution.
Technical indicators indicate excessive conditions
Rocket Lab’s RSI rose to 80, a threshold typically associated with overbought market conditions. Likewise, the Stochastic indicator has risen beyond the level of 90. The stock is currently trading at $143, which is significantly above its 50-week moving average of $68 and its 100-day moving average of $50.
Market watchers suggest that a bounce towards the $100 support area could be achieved if downward pressure continues. This price point represents the stock’s previous peak in January.
Firefly Aerospace stock is down nearly 12% Astspace Mobile It fell nearly 9% during Monday’s session. Intuitive Machines also posted losses. Collectively, these four companies posted average gains of 59% throughout April.
The Procure Space ETF was positioned more than 20% above its 50-day moving average entering Monday trading. A pullback to this technical level would constitute a major correction for the ETF.
SpaceX’s public offering could spur sector-wide profit-taking
SpaceX’s IPO is scheduled for June, and could give Elon Musk’s aerospace venture a valuation exceeding $2 trillion. Polymarket traders are betting that the company will achieve that market capitalization on its first trading day. The offering will set a new record as the largest initial public offering in history.
Space stocks They rallied in the months leading up to this historic event. However, market strategists warn that this trend could quickly reverse once the IPO is implemented. News selling loops are a common market phenomenon in which participants accumulate their positions before important events, then liquidate when those events occur.
Valuation metrics across the sector have reached high levels. AST SpaceMobile requires 260 times its projected 2026 revenue. Rocket Lab trades at 91 times sales, a significant increase from less than 20 times one year ago. Redwire’s valuation is approximately 9 times sales, compared to 3 times previously.
Rocket Lab maintains strong operating momentum. The organization posted revenue growth of 43% to $200 million last quarter and holds a contract backlog of $2.2 billion. The company also successfully completed a system requirements review for the Space Development Agency’s Tracking Layer 3 constellation under an $816 million agreement, pushing total SDA-related contracts to over $1.3 billion.
However, the company reported a quarterly loss of $40 million and carries a forward price-to-sales multiple of 48. Profitability remains a goal for the future rather than current financial performance.
The space sector continues to attract significant market interest heading into June, with SpaceX’s public market debut poised to set the tone for the industry in the near term.
