Shares of Rocket Lab (NASDAQ:RKLB) closed 12.17% lower on September 12 following the announcement that its top insider sold stock. Per an SEC filing, Rocket Lab founder and CEO Peter Beck sold 3.6 million shares (worth $22.3 million) of the space launch services and systems provider.
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This move by the CEO came at a time when shares were already seeing a pullback over recent months. That said, investors should note that the stock sell-off by corporate insiders is not always a bad sign. However, keeping track of insiders’ activities could help investors make well-informed investment decisions, especially in cases where trades are informative. Informative Buy or Sell transactions indicate insiders’ sentiment and possess a higher predictive ability.
It is worth noting that as per TipRanks’ Insider Trading Activity Tool, the Insider Confidence Signal for RKLB was already negative before the sale of shares by the CEO, based on the disposal of the stock by two insiders.
To help investors, TipRanks scans regulatory (SEC) filings to determine whether insider trades are Informative or Uninformative and then presents data on its Insider Trading pages. Interestingly, TipRanks offers daily insider transactions and a list of the top corporate insiders. It also provides a list of hot stocks sporting either a Very Positive or Positive insider confidence signal.
Rocket Lab Stock Performance
After underperforming in 2022, Rocket Lab stock showed recovery this year. The stock hit a 52-week high of $8.05 on July 19 and more than doubled. The successful space launches, an increase in launch bookings, steady pricing, and a focus on improving margins drove its stock higher.
However, since July 19, RKLB stock has trended lower, losing about 33% of its value.
As Rocket Lab stock has given up a substantial portion of its gains, let’s look at what the Street recommends for its shares.
Is Rocket Lab a Buy or Sell?
Rocket Lab stock has a Moderate Buy consensus rating on TipRanks, reflecting five Buy and two Hold recommendations. While analysts are cautiously optimistic, Cai von Rumohr of TD Cowen, who reiterated a Buy on RKLB stock on August 9, expects it to benefit from improving pricing power and competitors’ failures.
Analysts’ average price target of $9.61 implies 81.15% upside potential from current levels.
