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Shares of Rocket Lab (NASDAQ: RKLB) launched over 14.1% this week and hit above $5 a share, according to data from S&P Global Market Intelligence. The space economy upstart recently hit a milestone by launching its 50th Electron rocket as it makes progress to compete with SpaceX in the rocket launch business.

It is still unprofitable, but management has large ambitions to become one of the backbones of the space economy. Here's why Rocket Lab stock was soaring this week.

Fastest company to 50 launches

This week, Rocket Lab successfully launched its small scale Electron Rocket for the 50th time. The company is ramping up launching capacity as it tries to compete with SpaceX and other space economy companies. In fact, the Electron rocket system has hit its 50th launch faster than SpaceX's Falcon 9, doing so in around seven years. Now, with major contracts from government and corporate customers, Rocket Lab is hitting its next leg of growth.

Investors are likely applauding these developments as Rocket Lab aims to start scaling its rocket launching business. The most important thing for a rocket company is reliability of launches. In simple terms, you don't want your rockets to blow up. Rocket Lab is building a reputation as a reliable rocket launching enterprise, which will likely create a flywheel that attracts even more customer contracts.

Over the last 120 months, Rocket Lab has generated $282 million in revenue and $69 million in gross profit. Both numbers have grown significantly in recent years. However, it is still burning $137 million in free cash flow a year due to its launch infrastructure build-out.

Is the stock a buy?

After rising 14% this week, Rocket Lab has a market cap of $2.5 billion. The company is still in its early stages, losing a lot of money, and faces huge competitors such as SpaceX. There is a real chance this company will fail.

However, there is still a lot of potential upside. The space economy is growing rapidly, with SpaceX valued at over $100 billion. If Rocket Lab keeps growing it has a long runway to reinvest, creating a ton of upside for any shareholder who holds for multiple years. It is likely its market cap would be much higher than $2.5 billion if it can successfully scale its rocket launching business. For that reason, investors should give this space economy stock a chance in their investment portfolios.

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Brett Schafer has no position in any of the stocks mentioned. The Motley Fool recommends Rocket Lab USA. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.