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Virgin Galactic Holdings (SPCE)
NYSE:SPCE
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Virgin Galactic Holdings
(NYSE:SPCE)40Underperform
Positive Factors
Fleet Expansion
Virgin Galactic plans to expand its spacecraft fleet to 4 Delta-class vehicles and introduce a new mothership by 2028, funded by $300 million in growth capital.
Profitability and Growth
SPCE raised additional $37M through issuance of 4.9M shares and continues to believe it has sufficient capital to reach profitability.
Negative Factors
Financial Risks
Despite cash balance of $744mn, ongoing cash burn remains high.
Virgin Galactic Holdings (SPCE) vs. S&P 500 (SPY)
Market Cap
$123.99M
Dividend YieldN/A
Average Volume (3M)1.67M
Price to Earnings (P/E)―
Beta (1Y)2.63
Revenue Growth3.47%
EPS Growth53.31%
CountryUS
Employees805
SectorIndustrials
Sector Strength66
IndustryAerospace & Defense
Share Statistics
EPS (TTM)-14.65
Shares Outstanding35,528,350
10 Day Avg. Volume1,626,481
30 Day Avg. Volume1,670,114
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)16.97
Price to Cash Flow (P/CF)-0.40
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$14.83Price Target Upside334.90% Upside
Rating ConsensusHold
Number of Analyst Covering4
Virgin Galactic Holdings Business Overview & Revenue Model
Company DescriptionVirgin Galactic Holdings, Inc. is a pioneering aerospace company that focuses on commercial spaceflight. Founded by Sir Richard Branson, the company aims to provide suborbital spaceflights to space tourists, as well as scientific research missions. Virgin Galactic operates in the aerospace and space tourism sectors, offering its customers a once-in-a-lifetime opportunity to experience space travel and weightlessness aboard its spacecraft.
How the Company Makes MoneyVirgin Galactic makes money primarily through the sale of tickets for its commercial spaceflights. The company charges individuals for a seat on its spacecraft, with prices for a single ticket reaching up to several hundred thousand dollars. This revenue model targets affluent customers interested in the novelty and experience of space travel. Additionally, Virgin Galactic generates revenue through partnerships and contracts with research institutions and government agencies by offering its spacecraft for scientific research missions. These partnerships may involve conducting experiments in microgravity environments or testing new aerospace technologies. Other potential revenue streams include merchandise sales and licensing deals related to the Virgin Galactic brand.
Virgin Galactic Holdings Financial Statement Overview
Summary
Virgin Galactic Holdings faces financial challenges with negative earnings and cash flow issues. Despite positive revenue growth, significant leverage and declining equity threaten financial stability. The company must improve cost management and operational efficiency to secure long-term viability.Income Statement
Virgin Galactic Holdings exhibits strong gross profit margins, though overall profitability remains a challenge with negative net income and EBIT. Revenue growth is positive but modest, indicating room for cautious optimism. The company needs to focus on improving operational efficiency and cost management to enhance net profitability.40
Negative
Balance Sheet
The balance sheet shows a high debt-to-equity ratio, pointing to potential leverage risks. Stockholders' equity is declining, and the equity ratio is weakening, indicating decreasing financial stability. Improving equity and managing debt levels are critical for long-term sustainability.35
Negative
Cash Flow
Cash flows remain negative with significant free cash flow deficits. The company is yet to generate positive operating cash flow, leading to concerns over liquidity and cash flow sustainability. Free cash flow to net income ratio suggests inefficiencies that need to be addressed to improve cash flow performance.30
Negative
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 7.04M | 6.80M | 2.31M | 3.29M | 238.00K | Gross Profit |
| 7.04M | -43.74M | 406.00K | 3.02M | 65.00K | EBIT |
| -376.63M | -531.51M | -499.98M | -319.54M | -275.28M | EBITDA |
| -318.27M | -475.64M | -476.33M | -341.28M | -635.07M | Net Income Common Stockholders |
| -346.74M | -502.34M | -500.15M | -352.90M | -273.04M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 563.23M | 874.04M | 909.01M | 603.90M | 665.92M | Total Assets |
| 961.23M | 1.18B | 1.14B | 1.07B | 803.99M | Total Debt |
| 420.12M | 417.89M | 415.72M | 42.48M | 27.52M | Net Debt |
| 241.51M | 201.09M | 113.43M | -482.00M | -638.40M | Total Liabilities |
| 638.95M | 674.04M | 659.72M | 174.57M | 141.47M | Stockholders Equity |
| 322.28M | 505.48M | 480.22M | 894.26M | 662.52M |
| Cash Flow | Free Cash Flow | |||
| -474.56M | -492.50M | -396.73M | -235.40M | -250.36M | Operating Cash Flow |
| -352.70M | -448.19M | -380.24M | -230.76M | -233.16M | Investing Cash Flow |
| 175.66M | -116.27M | -286.17M | -387.52M | -17.20M | Financing Cash Flow |
| 134.34M | 475.43M | 459.00M | 489.36M | 436.59M |
Virgin Galactic Holdings Technical Analysis
Negative
3.41
Price Trends
4.88
Negative
5.84
Negative
7.39
Negative
Market Momentum
-0.42
Positive
26.96
Positive
12.20
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SPCE, the sentiment is Negative. The current price of 3.41 is below the 20-day moving average (MA) of 3.99, below the 50-day MA of 4.88, and below the 200-day MA of 7.39, indicating a bearish trend. The MACD of -0.42 indicates Positive momentum. The RSI at 26.96 is Positive, neither overbought nor oversold. The STOCH value of 12.20 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SPCE.
Virgin Galactic Holdings Risk Analysis
Virgin Galactic Holdings disclosed 57 risk factors in its most recent earnings report. Virgin Galactic Holdings reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Virgin Galactic Holdings Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $1.19B | ― | -23.67% | ― | 12.49% | 24.15% | |
62 Neutral | $8.11B | 13.34 | 1.17% | 3.02% | 4.16% | -15.14% | |
57 Neutral | $281.96M | ― | -132.51% | ― | 24.15% | 35.73% | |
45 Neutral | $8.46B | ― | -40.59% | ― | 78.34% | -1.13% | |
40 Underperform | $123.99M | ― | -83.78% | ― | 3.47% | 53.31% |
* Industrials Sector Average
Performance Comparison
SPCE
Virgin Galactic Holdings
3.41
-31.19
-90.14%
SPIR
Spire Global
10.46
-1.49
-12.47%
RKLB
Rocket Lab USA
18.80
14.32
319.64%
PL
Planet Labs PBC
3.98
1.78
80.91%
Virgin Galactic Holdings Earnings Call Summary
Earnings Call Date: Feb 26, 2025 | % Change Since: -11.20% | Next Earnings Date: May 13, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted significant progress in Virgin Galactic's transition from an R&D company to one building operational assets, with advancements in SpaceShip design and financial management. However, the company continues to face challenges with limited revenue and ongoing cash burn until commercial operations begin in 2026.Highlights
Transition to Asset-Building Phase
2024 marked an inflection point for Virgin Galactic, shifting from an R&D-focused company to one that builds real assets. The company has begun the fabrication of tools and parts for new SpaceShips, with the first assembly set to start next month at the SpaceShip Factory in Phoenix.
SpaceShip and Rocket System Advancements
New SpaceShips are designed to fly twice a week with a lifespan of over 500 spaceflights. The world's most powerful hybrid rocket system, part of these SpaceShips, is recognized for its safety features and quick refueling capabilities.
Operational and Financial Improvements
Total operating expenses for Q4 2024 were $82 million, down from $117 million in the prior year, reflecting a shift from R&D to capital investments. Adjusted EBITDA improved to negative $63 million from negative $84 million year-over-year.
Strong Financial Position
Virgin Galactic ended 2024 with $657 million in cash, cash equivalents, and marketable securities. The company generated $138 million in gross proceeds through an equity offering program.
Revenue Growth and Ticket Price Increase
Revenue for 2024 was $7 million, driven by two commercial spaceflights. Average ticket prices for the last spaceflight rose to $800,000 per seat from just over $300,000 in the prior year.
Lowlights
Limited Revenue Generation
Revenue for Q4 2024 was only $400,000, derived from future astronaut membership fees, indicating limited revenue streams during the asset-building phase.
Continued Cash Burn
Free cash flow was negative $117 million in Q4 2024, reflecting ongoing capital expenditures and operational costs during the transition phase.
Delayed Positive Cash Flow
Cash inflows are not expected until the start of commercial service in mid-2026, with cash consumption anticipated to continue through 2025.
Company Guidance
During the Virgin Galactic fourth quarter and full year 2024 earnings call, CEO Michael Colglazier provided guidance indicating that 2025 will be a year of momentum for the company, as they transition from an R&D-focused organization to a manufacturing entity. The company is on track with its timeline for building new SpaceShips, aiming for the first commercial research spaceflight in the summer of 2026 and the first private astronaut spaceflight in the fall of 2026. The new SpaceShips are designed to fly twice a week, with a lifespan of over 500 spaceflights, marking a significant step forward in commercial space travel. Financially, Virgin Galactic reported a 29% reduction in operating expenses for 2024, with total expenses at $384 million, down from $538 million in the prior year. The company ended the year with $657 million in cash and marketable securities and expects cash spending to decelerate in 2025 as they complete investments in tooling and manufacturing capacity. The guidance emphasized the goal of achieving EBITDA-positive operations by introducing two new SpaceShips, projecting annual revenues of approximately $450 million with an 80% contribution margin.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.