Five years ago, Rocket Lab (NASDAQ: RKLB) was a small rocket company that plenty of investors had never heard of. Since then, it has gone on an absolute tear. Could anyone have seen a run like this coming back then? Its believers sure did. Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue " A 650% return in five years Five years ago, Rocket Lab shares traded just above $10.60. Today it trades around $80. A $5,000 investment in 2021 would now be worth around $37,810 today -- a more than 650% gain. Take a look at the incredible run in the chart below. RKLB data by YCharts The bottom line So where does it go from here? The growth story here is real. The space industry is expanding rapidly, and the company just reported a record backlog of $2.36 billion. Image source: Getty Images. But if you ask me, investors have gotten ahead of themselves. The stock trades at more than 60 times its annual sales and it is burning cash fast. Its free cash flow last year was more than $270 million. And operationally, it continues to delay its Neutron rocket. This is absolutely critical to the company's long-term success, and if Neutron is delayed further, the stock could fall hard. Still, I won't deny there's a lot to like. I just think the valuation is off. Where to invest $1,000 right now When our analyst team has a stock tip, it can pay to listen. After all, Stock Advisor's total average return is 981%* -- a market-crushing outperformance compared to 216% for the S&P 500. They just revealed what they believe are the 10 best stocks for investors to buy right now, available when you join Stock Advisor. See the stocks " *Stock Advisor returns as of August 15, 2026. Johnny Rice has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Rocket Lab. The Motley Fool has a disclosure policy.