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Virgin Galactic Holdings: Strong Buy Rating Driven by Strategic Progress and Financial Resilience

Virgin Galactic Holdings: Strong Buy Rating Driven by Strategic Progress and Financial Resilience

Analyst Oliver Chen of TD Cowen maintained a Buy rating on Virgin Galactic Holdings, retaining the price target of $4.50.

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Oliver Chen has given his Buy rating due to a combination of factors that highlight Virgin Galactic Holdings’ potential for future growth. The company has completed the design phase of its spaceships and is now in the fabrication and assembly phase, with plans to begin commercial service in Fall 2026. This timeline adjustment from the previous target of Summer 2026 is due to a delay in fuselage fabrication, but management is confident in resolving this issue efficiently.
Virgin Galactic’s financial position is also a significant factor in this rating. The company has a cash reserve of $0.5 billion, which management believes is sufficient to reach the commencement of commercial operations. Additionally, the potential revenue from the planned Delta Class Spaceships is substantial, with projections of $450 million per year at a 20-25% EBITDA margin once two spaceships are operational. This potential increases significantly with full-scale operations, which could generate $990 million annually at a 45-50% EBITDA margin. Despite the risks associated with the pre-revenue stage and reliance on external suppliers, the company’s strategic planning and financial resources position it well for future success.

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