AE Industrial sold its remaining shares in a private block sale, removing a persistent selling pressure that had capped the stock near $10. With this overhang gone and a technical breakout underway, the stock is poised to re-rate toward its intrinsic value given its $450M revenue and growth profile. The stock is significantly undervalued at a ~$2B market cap, with a near-term price target of $30-$50. Macroeconomic conditions, poor quarterly earnings reports, and management execution issues could derail the move.
The author states Rocket Lab succeeded where >100 other small launch vehicle companies failed, making it a rare asset. Valuing it should consider the hypothetical cost to fund 100 new attempts to replicate it. This high "replacement cost" means the market should assign it a premium valuation (e.g., high Price/Sales multiples), far above its current price. Buy RKLB shares and Jan 2028 $75 calls, with an extreme price target of $519, implying multi-bagger returns. Competition (SpaceX, Blue Origin), execution risk, failure to grow revenue, the core analogy being flawed, and high valuation multiples contracting.