Shares of Virgin Galactic Holdings (SPCE) fell in after-hours trading after the aerospace company reported earnings for its first quarter of Fiscal Year 2026. Earnings per share came in at -$0.81, which beat analysts’ consensus estimate by $0.19 per share. In addition, sales decreased by 50% year-over-year, with revenue hitting $230,000. This missed analysts’ expectations by $10,000.
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CEO Michael Colglazier said that the firm remains on track to begin flight testing of its new SpaceShip in Q3 2026, with spaceflights starting in Q4 2026. In addition, the company has moved the first of its new SpaceShips from the Assembly hangar to the Test-and-Launch hangar, where ground testing is now underway. He also said that spending continues to fall each quarter (as shown below), debt repayments are being made on or ahead of schedule, and cash levels of $251 million remain appropriate as the company moves through the final part of its pre-revenue phase.
Indeed, net cash used in operating activities declined to $54 million from $76 million, capital expenditures fell to $40 million from $46 million, and free cash flow improved to negative $93 million from negative $122 million. The company also raised $11 million through its at-the-market stock offering program in Q1, then raised roughly another $52 million in April, thereby leaving about $87 million available under the program.
SPCE 2026 Guidance
Looking ahead, Virgin Galactic has provided the following guidance for 2026:
- Q2 free cash flow of between -$87 million and -$92 million.
- Free cash flow is expected to improve each quarter sequentially after Q2.
Is SPCE Stock a Good Buy?
Turning to Wall Street, analysts have a Hold consensus rating on SPCE stock based on two Buys, three Holds, and one Sell assigned in the past three months, as indicated by the graphic below. Furthermore, the average SPCE price target of $3.66 per share implies 26.2% upside potential.
