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It’s one of the more discombobulating names in the financial markets right now. On a year-to-date basis, Rocket Lab (RKLB) has seen its shares more than double in value. Further, in the trailing six months, RKLB stock gained nearly 133%. While these are stats worth celebrating, the issue is that RKLB has suddenly plunged ahead of a key financial disclosure.

In the trailing five days, Rocket Lab has lost almost 16% of equity value. In the past 30 (calendar) days, RKLB stock slipped a little over 11%. That’s obviously not a great look, especially with the company set to release its third-quarter earnings results on Monday.

Ahead of the print, Wall Street analysts are anticipating that Rocket Lab will post a loss of 10 cents per share on revenue of $151.8 million. In the year-ago quarter, the company reported a loss of 10 cents per share on sales of $104.81 million.

For Q2, Rocket Lab impressed onlookers with record revenue of $144.5 million, representing a 36% jump against the year-ago comparison. Further, management disclosed a strong backlog and a robust pipeline of opportunities, including major launch initiatives.

Of course, with great success comes great expectations — and that might be contributing to investor jitters. Among the concerns that investors had about the Q2 report was elevated cash consumption and operating expenses that landed above expectations.

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However, it’s the quantitative picture that may be most worrying to market participants. When RKLB stock is arranged as a distribution of outcomes, its forward 10-week median returns can be arranged in the shape of a skewed bell curve, with prices ranging from $50 to $57.50 (assuming an anchor of $52.29). Further, price clustering would be expected to be predominant at $53.50.

Currently, RKLB stock is structured in a rare 3-7-U sequence: threeup weeks, seven down weeks, with an overall upward slope. Under this condition, the distributional curve shifts hard to the left (negative), with expected prices ranging from $29 to $57.50.

Most significantly, price clustering would likely be predominant at $38, which is far below the anchor. Of course, a strong earnings report could dramatically shift the sentiment regime so that must be taken into account. Still, at this moment, RKLB stock is flashing a risk signal.

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