u/LackToesToddlerAnts

Rocket Lab - one of the most thrown around name on this website but at this valuation what are your guys thoughts here? Compared to the market leader (SpaceX) it's valuation seems very tame and it's a pure play unlike SpaceX.

They also diluted the fuck out of their shareholder last year and half but investors seem to not fear it and actually appreciate it. RKLB has been using the money for strategic aqquistations.

Their financials

• They reported a record-breaking $200.3 million in revenue for Q1 2026 whihc is 63.5% year-over-year increase. For the upcoming Q2 2026, the company expects to break that record again, issuing revenue guidance between $225 million and $240 million.

SOURCE - YAHOO FINANCE Gross Margin: Hit a record 38.2%. Adjusted EBITDA: Narrowed to a loss of $11.75 million, which represents a 60.8% improvement year-over-year.

Backlog: Surpassed a record $2.2 billion, buoyed by major Electron, HASTE, and Neutron launch contracts.

How do you value investors feel not buying into this and instead going in on NVO, UNH, ADBE, and CRM type "value investments" on biggest bull run?

The most common companies getting thrown around here are NOW, CRM, ADBE, CRWD with the first three being close to their 52week lows.

Although I’ve seen this thrown around it’s not often and it’s SAP.

SAP - at its core is an ERP system that’s used by every major company. It’s not super flashy upstream product, it’s the opposite it’s the first record of truth. A customer orders something, a manufacturer produces something, an insurance company gets a claim filed, HR….,Finance. Every mid to large cap company uses AND needs this. SAP captures it all and then the data is processed and synthesized for upstream analytics. You might have used concur at work when you travelled.

This is one of the most stickiest product out there: not just because of the necessity but the level of customizations companies can do AND have done on SAP. It’s very difficult to move to a different ERP and much less build your own. Companies have tried and failed and lost billions and came to SAP.

The Fears

1. There will be new ERP competitors - maybe or maybe not but companies will not take the chance or risk with a new vendor. The risk is not worth the return. They might switch to an existing proven vendor like D365 or Oracle.

2. Support for existing SAP ends soon and customers have to go to cloud so it’s an opportunity for them to leave SAP and go with a another vendor or delay the migration

- This is very valid. I’ve seen companies leave their ERP for another vendor because how much they hated it. The problem with this - the amount of time and effort. In this economy I don’t think companies would want to spend capital to make this change. I believe companies will just stick to SAP cloud and this is a tailwind.

3. Agentic AI and Licensing - why need licenses for every employee when have an agent get a license? The move to the cloud will move away from traditional licensing model and towards reoccurring.

4. SAP isn’t very innovative and they are slow with wait and see approach. Yes this has been the case in the past and I’m 50/50 on it. I want them to be more aggressive but at the same time I can see why they move with cautious. They have a strong MOAT so why spend unnecessary cash but rather follow Apples approach.

I don’t want to get into the fundamentals here but for me the price offers a good risk/return. I’ll get into financials and fundamentals at a later post if people care.

Thoughts?