Rocket Lab is up by 39.96%. Here`s why...

Shares of Rocket Lab (RKLB) rose sharply Monday after the company announced a major government contract and reported a record year of launches.

The stock climbed about 9.5% during afternoon trading following news of the agreement and operational milestone. Shares later closed at $77.67, up roughly 10.5% from the previous close.

Rocket Lab said it secured its largest contract to date, an $816 million award from the U.S. Space Development Agency. The deal calls for the design and manufacture of 18 satellites.

The satellites are intended for a missile-defense system focused on tracking advanced threats. The contract added significantly to the company’s order book.

The company also announced it completed its 21st Electron rocket launch of the year. That marked a new annual record for Rocket Lab.

All 21 Electron launches were successful. The company said the performance represented a perfect success rate for the year.

Following the announcements, analysts at Stifel raised their price target on Rocket Lab shares. The firm cited the contract win and launch performance.

Rocket Lab shares have shown sharp price swings over the past year. The stock recorded 74 moves of more than 5% during that period.

Three days earlier, the shares gained 16.6% after reports of another Space Development Agency contract. That award was valued at up to $805 million and also involved 18 satellites for missile warning and tracking.

That earlier contract added to an existing contracted backlog of about $1.1 billion. The announcement followed news of a successful mission for the U.S. Space Force.

Rocket Lab said that mission was completed five months ahead of schedule. The launch further highlighted the company’s operational pace.

Since the beginning of the year, Rocket Lab shares are up 211%. At around $77.50, the stock set a new 52-week high.

An investment of $1,000 in Rocket Lab shares five years ago would now be worth about $7,570.