Aerospace company Virgin Galactic Holdings (SPCE) is set to announce its second-quarter 2025 earnings after the market closes on August 6. Analysts are expecting earnings per share to come in at -$2.34 on revenue of $450,000. This compares to last year’s EPS and revenue figures of -$4.36 and $3.36 million, respectively. These low figures are due to the company pausing its spaceflights in order to focus on building its next-generation Delta-class spacecraft.
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Interestingly, though, it is worth noting that Virgin Galactic has seen its EPS figure trend higher during the past eight quarters, which has led to a winning streak in terms of earnings beats despite making no progress when it comes to revenue growth. This can be mostly attributable to falling operating expenses, such as research and development, as well as selling, general, and administration costs.
However, cutting costs by itself will not be enough for the company to sustain itself due to its insignificant amount of revenue relative to its massive cash burn rate. Furthermore, the firm has never turned a profit since going public in 2019, and its stock has dropped more than 34% over the past year. Still, Virgin Galactic believes that its Delta-class spaceship could generate $450 million in annual revenue with strong profit margins when it launches commercially in 2026.
Options Traders Anticipate a Large Move
Using TipRanks’ Options tool, we can see that options traders are expecting a 17.4% move from SPCE stock in either direction right after its earnings report. The expected earnings move is determined by calculating the at-the-money straddle of the options closest to expiration after the earnings announcement.
It is worth noting that SPCE’s after-earnings price moves in the past 12 quarters have mostly been smaller than the 17.4% that is expected. This implies that current option prices might be overvalued.
Is SPCE Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on SPCE stock based on two Buys and two Holds assigned in the past three months, as indicated by the graphic below. Furthermore, the average SPCE price target of $4.69 per share implies 21% upside potential.
