Space travel company Virgin Galactic Holdings (SPCE) will release its Q2 financials on August 7. Wall Street analysts expect the company to report a loss of $4.97 per share for Q2 2024, which is an improvement from the $9.20 per share loss reported in the prior-year quarter. Meanwhile, analysts expect revenues of $3.36 million, reflecting an 80% year-over-year increase, according to TipRanks’ data.
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In terms of SPCE’s earnings surprise history, we see that the company has surpassed consensus estimates in each of the last four consecutive quarters.
TipRanks Insights: Bulls vs. Bears on SPCE
According to TipRanks’ Bulls Say, Bears Say tool pictured below, the bulls note that SPCE is well-capitalized with around $900 million in cash. The company plans to expand weekly commercial flights with two VSS-Delta spaceships, each carrying six passengers up to eight times a month. Further, they note that SPCE aims to achieve positive free cash flow by the second half of 2026.
However, it’s important to keep the bearish arguments in mind. Bears say it’s uncertain whether the business can scale quickly enough to generate cash flow and if there’s long-term demand for its product. Also, they note that Virgin Galactic is generating low revenue relative to its cash burn as it focuses on the development of its fourth-generation Delta-class space vehicles.
It’s important to highlight that Virgin is developing its Delta spaceships to be capable of executing eight spaceflights per month, with 12 times the monthly capacity of its VSS Unity vehicles.
Options Traders Anticipate a Minor Move
Using TipRanks’ Options tool, we can see what options traders are expecting from the stock immediately 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. If this sounds complicated, don’t worry, the Options tool does this for you.
Indeed, it currently says that options traders are expecting just a 2.36% move in either direction.
What Is the Forecast for SPCE Stock?
Overall, the Street has a Hold consensus rating on SPCE, alongside an average price target of $36.40. However, analysts’ views on the stock are likely to change once the company reports its Q2 earnings tomorrow. The shares of the company have declined 84% over the past six months.
Bottom Line
Analysts anticipate that SPCE will see improvements in both revenue and earnings for Q2 compared to the previous year. However, concerns persist about the company’s negative cash flow and overall weak financial performance.
