Is Rocket Lab Corp. overvalued or undervalued?

As of 9 August 2021, the valuation grade for Rocket Lab Corp. has moved from does not qualify to risky, indicating a shift in perception regarding its investment potential. The company appears to be overvalued given its significant negative P/E ratio of -99.54 and EV to EBITDA of -120.57, which suggest that the market is pricing in expectations that may not be met. Additionally, the absence of a PEG ratio and a dividend yield further underscores the risk associated with this investment.
In comparison to its peers, Rocket Lab Corp. stands out with its negative valuation metrics, particularly when contrasted with the broader aerospace and defense industry. For instance, while Rocket Lab's P/E ratio is -99.54, other companies in the sector may exhibit more favorable valuations. Notably, the stock has demonstrated impressive returns, with a 1Y return of 562.64%, significantly outperforming the S&P 500's 17.14% over the same period. However, despite these strong returns, the underlying valuation metrics suggest that Rocket Lab Corp. is currently overvalued.