Rocket Lab USA, Inc. (RKLB) surged 5.15% in pre-market trading on Monday, drawing investor attention as the space company was highlighted in a financial analysis for trading below its estimated fair value based on cash flows.

The movement comes after a Simply Wall St article flagged Rocket Lab as an undervalued stock according to its discounted cash flow model. The analysis pointed to the company's growing government contracts, including recent U.S. Air Force and NASA missions, as well as the planned Iridium Communications acquisition, which could support recurring revenue through a global communications network. Despite the company being currently unprofitable, the DCF valuation suggests the stock trades below its intrinsic value, providing a catalyst for value-oriented investors.

The space sector company, which generates most of its revenue from Space Systems and Launch Services, is seen as a play on the expanding commercial space industry. The article's focus on Rocket Lab’s cash flow potential and its vertically integrated space platform appears to have resonated with pre-market traders, driving the upward price movement.