Rocket Lab and The Trade Desk Are 2 Beaten-Down Stocks to Buy Before 2027
Rocket Lab (RKLB +1.46%) and The Trade Desk (TTD +3.31%) have been rough stocks to own. Rocket Lab ended at $58.86 on Monday, Nov. 9, off around 61% from its May 27 record of $150.23. The Trade Desk finished at $14.93, around 87% below its last price of 2024.
Both companies posted third-quarter results after Monday’s close. Rocket Lab shares dipped in after-hours trading, but The Trade Desk’s spiked before losing most of the gain.
Going in, I wasn’t ready to buy either stock, and I had a specific bar in mind for each report. Both cleared it.
I now think each is worth a small position, with one milestone apiece that 2027 needs to deliver.
Image source: Getty Images.
Rocket Lab: growth is picking up
Rocket Lab’s third-quarter revenue jumped 73% year over year to a record $268 million, up from 62% growth in the second quarter. What’s more, its backlog (signed work not yet recorded as revenue) climbed 52% from the end of June to around $3.57 billion. That’s around four times what the space company took in over the past four quarters.
The company also signed more than $515 million in contracts for Neutron, its bigger reusable rocket still in development, giving it 16 booked missions before it’s flown once.
Losses came in where I’d hoped. Rocket Lab lost $18.0 million on a non-GAAP (adjusted) basis, measured by earnings before interest, taxes, depreciation, and amortization (EBITDA). That was lower than the $26.3 million loss a year before and near the better end of management’s forecast of $17 million to $23 million. Granted, it was higher than the second quarter’s $8.8 million loss. But management expects the fourth-quarter loss by that measure to drop to between $14 million and $20 million. And the company finished September with around $4.4 billion in cash, but most of it is set aside for its pending purchase of Iridium Communications, which Rocket Lab funded by selling new shares.
RKLB – Rocket Lab
$59.72+$0.86 (+1.46%)
NASDAQ · As of 3:00 PM ET 11/10/26
Rocket Lab’s 2027 milestone is Neutron’s first launch. In October, the company pushed that debut to 2027 after spotting voids in part of a propellant tank dome. CEO Sir Peter Beck said a clean replacement dome has since been built, with hydrostatic and cryogenic tests still ahead.
On Monday’s call, CFO Adam Spice said adjusted EBITDA should go positive within about six months of Neutron’s first successful flight.
Including preferred shares that convert into common stock, Rocket Lab is worth around $40 billion, or about 45 times its sales for the past four quarters. It fetched more than 140 times sales at the May peak. But even today’s price assumes Neutron works.
The Trade Desk: shrinking, but cheap
The Trade Desk’s third-quarter revenue fell 0.5% year over year to $736 million. This was far above management’s August forecast of “at least $650 million,” which implied a drop of around 12%. And its fourth-quarter outlook of at least $755 million would be about 11% below last year’s $847 million.
But the trend is heading the wrong way. First-quarter revenue climbed 12%, and growth then slowed to 3% before dropping below zero. The third quarter also included $15 million from a strategic partner that the ad tech company doesn’t expect to recur.
“[W]e are still operating below the level of growth we expect from ourselves,” said CEO Jeff Green in the earnings release.
The case for the stock is its price. Free cash flow hit around $565 million in the first three quarters of 2026, up 13% year over year, and the company had no debt on its balance sheet at the end of September. Its market cap of about $7 billion is only about eight times its free cash flow in the past four quarters. Plus, the board added $731 million to the buyback authorization, for a total of $1 billion available — around 14% of The Trade Desk’s market value.
TTD – The Trade Desk
$15.43+$0.50 (+3.31%)
NASDAQ · As of 3:00 PM ET 11/10/26
The Trade Desk’s 2027 milestone is a quarter of revenue growth. In the first quarter, this would mean beating the $689 million it posted a year before.
Why keep both positions small?
Another Neutron delay might hit Rocket Lab stock hard. And The Trade Desk still needs to prove its current clients will spend more again — its 10-Q says they spent less in the third quarter.
In the end, both reports delivered the evidence I was waiting for. Rocket Lab’s growth and backlog are accelerating. And The Trade Desk produces a lot of cash at a low valuation while its revenue declines arguably look closer to easing.
I think both stocks are worth considering here, as small positions. I’d only add to either after 2027 shows if Neutron flies and The Trade Desk is growing again.
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Source: www.fool.com — article syndicated from the publisher’s feed; all rights remain with the original publisher.