Rocket Lab (NASDAQ: RKLB) stock price is in a strong bull run this year and is now hovering at its all-time high.

These gains have continued this month as top Wall Street analysts buy ahead of the upcoming SpaceX IPO.

It has soared to $127, up by 402% in the last 12 months. So, is it a good buy?

Analysts are bullish on RKLB stock ahead of SpaceX IPO

One of the most popular finance stories this year is the upcoming SpaceX IPO, which is set to happen in June this year.

It will be the biggest IPO ever as the company will have a valuation of over $1.5 trillion. 

The upcoming IPO has pushed investors to rotate to companies in the IPO industry, including Rocket Lab. Analysts are highly bullish on the company, with New Street Research boosting the target to $150. 

Deutsche Bank analysts raised their target from $73 to $120, while Needham increased it to $121.

Other highly bullish analysts are from companies like Citigroup and Citizens.

Data shows that the consensus target for the RKLB stock is $93.

While this target is lower than the current price, it is much higher than $23.50, where it was 12 months ago.

Growth is accelerating

Analysts cite the ongoing revenue growth. The most recent results showed that its revenue jumped by 63.50% in the first quarter to $200.3 million, with its backlog soafring to a record high of $2.2 billion.

Its backlog has soared by over 20% YoY, with the company receiving 31 new Electron and HASTE contracts. It received five new Neutron orders.

Analysts are optimistic that the company’s growth will continue in the foreseeable future.

The average estimate is that its revenue will jump by 58% in Q1 to $229 million, while the annual figure will jump by 50% to $907 million. It will then make over $1.2 billion in the next financial year.

The challenge, however, is that the company has become highly overvalued, spotting a market cap of $73 billion. This is a big number that gives it a forward price-to-sales ratio of 81, which is quite substantial.

The other risk is that the stock may suffer a reversal once the SpaceX IPO happens. This situation is known as buying the rumor and selling the news. 

Rocket Lab stock has some technical risks

RKLB stock chart | Source: TradingView

The daily chart shows that the RKLB stock price surged to a record high of $139 recently.

This rally happened after it formed a cup-and-handle pattern whose upper side is at $99.72.

A C&H is one of the most common bullish continuation signs in technical analysis. 

Now, however, the stock has moved much higher than the 50-day and 100-day moving averages.

That is a sign that it may go through mean reversion, where an asset moves back to its historical averages.

If this happens, it may drop to the key support at $100 before bouncing back later this year.

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