Is RocketBoots (ASX:ROC) a buy after a 200% surge?

RocketBoots Secures A$9M ARR Deal and A$7M Raise to Fuel Global Growth

RocketBoots (ASX:ROC) has emerged as a standout small cap on the ASX, capturing investor attention following the announcement of a A$9 million annual recurring revenue contract with a global tier one retailer. More recently, the company raised A$7 million through a placement to support international expansion, issuing 28 million new shares at A$0.25 and bringing four new institutional investors onto the register.

We view this raise as growth focused rather than a balance sheet rescue, which is an important distinction. With a marquee customer now secured and fresh capital in place, RocketBoots appears intent on building momentum rather than simply stabilising operations. The key question for investors now is whether the company can convert this early traction into a repeatable growth story.

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RocketBoots Steps Up

At the September quarter, RocketBoots was operating at a loss of around A$1.2 million, which reflects the small scale of the business at that point. Against that backdrop, the recently announced A$9 million in annual recurring revenue represents a clear first step toward genuine commercial momentum and, importantly, credibility with large enterprise customers.

The company also disclosed that it is currently in a trial phase with one of Mexico’s largest retail banks, reinforcing the view that sales traction is building. That said, investors will want to see these trials convert into contracted, revenue-generating customers over time.

What stands out to us is the underlying business model. RocketBoots is capital light, with a large portion of current losses driven by staff and administrative costs rather than infrastructure or hardware.

As scale improves, this cost base should become more efficient. If commercial momentum continues, we believe the model has the potential to evolve into a high margin, cash flow generative business, but execution over the next few reporting periods will be critical.

Why we think now isn’t the right time to pull the trigger

What we do like about RocketBoots is the strength of its balance sheet. Prior to the recent placement, the company had no debt and around A$1 million in cash, which already put it in a solid position for a business of this size. With an additional A$7 million now raised, RocketBoots has meaningful financial flexibility to invest into product development and deepen its expanding partnerships. From a funding perspective, this is a healthy setup for a small cap growth company.

That said, we remain cautious on valuation. The stock has surged roughly 200% over the past few months, and based on June reporting, the company was trading on a price-to-sales multiple above 80. That implies the market is already pricing in very strong execution and growth. While we like the business model and the long term potential, we think it is more prudent to view RocketBoots as a hold for now and wait for a pullback before considering an entry.

This commentary is purely an opinion on valuation. If continued commercial partnerships materialise over the next few weeks, it could cause the stock to continue running upwards.