Shares of Rocket Lab Corporation (RKLB) fell 10.15% to $53.17 on Thursday morning, a decline of $6.01, after the company announced another delay to the inaugural launch of its Neutron rocket. Rocket Lab pushed the medium-lift rocket's first flight into 2027 after identifying manufacturing defects in key structural components, marking the latest setback in its expansion into the competitive medium-lift launch market.

Manufacturing Defects Identified in Neutron's First Stage

The company disclosed the revised schedule on Wednesday through an investor update and a regulatory filing. Rocket Lab said it identified manufacturing problems involving carbon composite structures in Neutron's first-stage barrels and propellant tank domes. These components provide the rocket's structural strength and help contain propellant during flight.

According to the company, engineers discovered small air pockets within the first-stage propellant tank dome cap during manufacturing inspections. Defects of this kind can weaken composite materials and create structural risks under extreme operating conditions. Rocket Lab has introduced manufacturing improvements to address the problems and strengthen component reliability.

The postponement follows an earlier setback in which a first-stage tank ruptured during testing in January. Rocket Lab subsequently moved its launch target toward the fourth quarter of 2026, but the further manufacturing challenges have extended the development schedule beyond the company's previous expectations.

Neutron Central to Expansion and Revenue Plans

Neutron represents Rocket Lab's planned expansion beyond its established small-launch operations into larger satellite missions. The company has said the reusable rocket is designed to lift payloads of up to 13,000 kilograms to low Earth orbit, a medium-lift class geared toward deploying satellite constellations and serving government and commercial customers. It is intended to compete with SpaceX's Falcon 9 for commercial and government launch contracts, a vehicle that has become the workhorse of the commercial launch industry in recent years. The revised timetable, however, delays Neutron's entry into that market along with its potential revenue contribution.

Rocket Lab originally announced Neutron in 2021 and initially targeted a 2024 launchpad milestone. The company later shifted its expected inaugural flight to 2025 following development and qualification challenges, and further testing complications and manufacturing problems have now pushed the target into 2027.

Rocket Lab continues to operate its Electron launch vehicle and to develop its HASTE capabilities. In September, the company announced a multi-year agreement covering 20 Electron missions for Japanese satellite operator Synspective, a deal that supports the existing launch business while Neutron undergoes additional manufacturing and testing work.

Wall Street Analysts Lower RKLB Price Targets

The revised Neutron schedule prompted several Wall Street analysts to lower their RKLB price targets. KeyBanc reduced its target from $135 to $100 following the company's latest development setback. Clear Street likewise lowered its target, from $129 to $105, after assessing the extended launch timetable.

The delay also extends Rocket Lab's development spending before Neutron can begin supporting commercial launch operations. Before attempting its inaugural flight, the company must complete manufacturing improvements, component qualification, and additional testing. These requirements remain central to Neutron's progress toward operational readiness.

Rocket Lab plans to continue reporting progress through its manufacturing and testing milestones. The company has published additional details about the revised Neutron schedule through its investor relations materials, and its next development updates are expected to clarify progress toward the planned 2027 launch.