Virgin Galactic Holdings (SPCE) AI Stock Analysis

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Virgin Galactic Holdings

(NYSE:SPCE)

Rating:48Neutral

Price Target:

$3.00

▲(0.00%Upside)

Virgin Galactic Holdings faces significant financial and operational challenges, with ongoing losses and cash flow issues. While there are strategic advancements and a strong cash position, the pre-revenue status and high leverage pose substantial risks. The technical and valuation metrics further reflect the stock's volatility and potential undervaluation.

Positive Factors

Luxury Consumer Experience

SPCE is working to harness competitive differentiation through the build of a luxury consumer experience supported by the spaceship turnaround times measured in days vs. months industry standard.

Operational Milestones

Operational milestones could unlock $8 per share on a DCF basis as the path to free cash flow positive becomes clearer.

Revenue and EBITDA Potential

Plans to add two more Delta Class Spaceships and one carrier ship in 2028 could yield $990mm in annual revenue at a 45-50% adj. EBITDA margin rate.

Negative Factors

Engineering Challenges

The price target of $4.50 reflects encouragement for future operations but also acknowledges the risks associated with a lack of revenue and softer, engineering related catalysts until 2H26.

Reliance on External Suppliers

SPCE relies on external suppliers to fabricate their spaceship fuselage, wings and feathering.

Unexpected Obstacles

Unexpected obstacles are common in aerospace programs and SPCE's ability to nimbly adapt to protect the critical path timeline for commercial service is a key investor focus.

Virgin Galactic Holdings (SPCE) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$125.14M

Dividend YieldN/A

Average Volume (3M)8.37M

Price to Earnings (P/E)―

Beta (1Y)2.71

Revenue Growth-34.33%

EPS Growth52.30%

CountryUS

Employees744

SectorIndustrials

Sector Strength87

IndustryAerospace & Defense

Share Statistics

EPS (TTM)-2.38

Shares Outstanding41,574,844

10 Day Avg. Volume5,437,625

30 Day Avg. Volume8,373,426

Financial Highlights & Ratios

PEG Ratio-0.06

Price to Book (P/B)1.91

Price to Sales (P/S)0.00

P/FCF Ratio-2.32

Enterprise Value/Market Cap8.25

Enterprise Value/Revenue31.55

Enterprise Value/Gross Profit-12.00

Enterprise Value/Ebitda-0.77

Forecast

1Y Price Target

$11.94

Price Target Upside298.00% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering4

Virgin Galactic Holdings Business Overview & Revenue Model

Company DescriptionVirgin Galactic Holdings, Inc. is an aerospace and space travel company pioneering human spaceflight for private individuals and researchers. Operating within the aerospace sector, Virgin Galactic aims to provide suborbital spaceflights to space tourists, as well as scientific research missions. The company develops commercial spacecraft and aims to offer a unique and transformative experience of space travel, making space more accessible to the public.

How the Company Makes MoneyVirgin Galactic generates revenue primarily through the sale of tickets for suborbital spaceflights, targeting affluent individuals and researchers interested in experiencing space travel. Each ticket provides customers with a journey to the edge of space aboard the company's SpaceShipTwo class vehicle. Additionally, Virgin Galactic earns money from payload services for scientific research and technology testing in microgravity conditions. The company also explores partnerships with governmental and commercial organizations for research missions and other space-related endeavors. Key factors contributing to its earnings include the successful execution of flights, market demand for space tourism, and strategic partnerships that enhance its service offerings.

Virgin Galactic Holdings Key Performance Indicators (KPIs)

Any

Operating Expense Breakdown

Operating Expense Breakdown
Details core costs like R&D, marketing, and admin, offering insight into how efficiently Virgin Galactic runs and where it’s prioritizing investment, crucial for understanding its path to profitability and strategic focus in the emerging space tourism industry.

Chart InsightsVirgin Galactic's operating expenses have notably decreased, particularly in research and development, reflecting a strategic pivot towards capital investments. This aligns with the earnings call's highlight of a 21% reduction in operating expenses and increased capital expenditures. The company is leveraging its strong cash position to advance SpaceShip production and explore new revenue streams, despite remaining in a pre-revenue phase. The focus on cost management and strategic advancements indicates a disciplined approach to future growth, even as they face logistical challenges and negative free cash flow.

Data provided by:

Main Street Data

Virgin Galactic Holdings Earnings Call Summary

Earnings Call Date:May 15, 2025

(Q1-2025)

% Change Since: -10.45%|

Next Earnings Date:Jul 31, 2025

Earnings Call Sentiment Positive

The earnings call highlighted significant progress in SpaceShip production and a strong cash position, along with plans for future initiatives and improved financial metrics. However, the company remains in a pre-revenue phase with negative free cash flow and faced some logistical challenges. Overall, the company's highlights, including strategic advancements and cost management, outweigh the lowlights.

Q1-2025 Updates

Positive Updates

Decreased Operating Expenses

Year-over-year operating expenses decreased by 21% to $89 million compared to $113 million in the prior year period. This was attributed to a shift in spending from research and development to capital investments.

Strong Cash Position

The company maintained a strong balance sheet with $567 million in cash, cash equivalents, and marketable securities.

SpaceShip Production Progress

Significant progress was made in developing next-generation SpaceShips, with advancements in rocket and propulsion systems, avionics, flight controls, and mechanical systems.

Launch of New Marketing Series

Virgin Galactic plans to launch a new series on their social channels to showcase the SpaceShip building process, engaging customers and investors.

Future Commercial Initiatives

Plans to reopen sales in Q1 2026 with a tailored onboarding experience for new customers and potential increased pricing. Exploration of a second Spaceport in Italy and potential new revenue streams with carrier aircraft adaptations.

Positive Adjusted EBITDA Trend

Adjusted EBITDA improved to negative $72 million from negative $87 million in the prior year period.

Negative Updates

Continued Pre-Revenue Phase

The company remains in a pre-revenue phase with revenue of only $500,000 from future astronaut access fees and event fees.

Free Cash Flow Negative

Free cash flow was negative $122 million in the first quarter, although this was within the range of guidance.

Delay in Wing Part Arrival

One of the wing parts expected to arrive at the SpaceShip factory was delayed, causing replanning of the assembly sequence.

Company Guidance

During the Virgin Galactic First Quarter 2025 Earnings Conference Call, several key metrics and guidance points were highlighted. The company anticipates its first research spaceflight in the summer of 2026, with private astronaut flights following in the fall. They reported a year-over-year decrease in operating expenses, down 21% to $89 million, reflecting a focus on creating capital assets. The company holds over $0.5 billion in cash, cash equivalents, and marketable securities. Capital expenditures grew to $46 million, up from $13 million in the prior year, as they continue investing in manufacturing assets. Revenue projections for the second quarter of 2025 are approximately $400,000, while they expect free cash flow to range between negative $105 million to $115 million. The CEO discussed re-opening ticket sales in Q1 2026 with anticipated price increases from the last price of $600,000. Additionally, Virgin Galactic is exploring potential incremental revenue opportunities with their carrier aircraft in government and research sectors.

Virgin Galactic Holdings Financial Statement Overview

Summary

Virgin Galactic Holdings is experiencing significant financial challenges, with negative profitability and cash flow metrics. The company continues to operate at a loss, with high expenses relative to minimal revenue. Despite a stable equity ratio, the high debt-to-equity ratio and ongoing cash burn raise concerns about financial sustainability.

Income Statement

Very Negative

Virgin Galactic Holdings is struggling with negative profitability metrics. The TTM gross profit margin and net profit margin are significantly negative, indicating high costs relative to revenue. The revenue growth rate shows some variability, but overall, revenue remains minimal compared to expenses. EBIT and EBITDA margins are also deeply negative, highlighting operational inefficiencies.

Balance Sheet

Negative

The balance sheet reveals a high debt-to-equity ratio, raising concerns about financial leverage. The return on equity is negative due to the company's ongoing losses. However, the equity ratio is relatively stable, suggesting that equity still constitutes a significant portion of total assets. This stability in equity provides some financial resilience.

Cash Flow

Negative

Free cash flow growth remains negative, reflecting ongoing cash burn. The operating cash flow to net income ratio shows consistency with the negative net income, while free cash flow to net income ratio is also negative. This indicates that the company is not generating positive cash flow to support its operations, posing sustainability challenges.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
5.51M	7.04M	6.80M	2.31M	3.29M	238.00K
	Gross Profit
-86.00M	-82.99M	-43.74M	406.00K	3.02M	65.00K
	EBIT
-353.92M	-376.63M	-531.51M	-499.98M	-319.54M	-275.28M
	EBITDA
-300.24M	-318.27M	-475.64M	-476.33M	-341.28M	-635.07M
	Net Income Common Stockholders
-329.21M	-346.74M	-502.34M	-500.15M	-352.90M	-273.04M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
489.52M	563.23M	874.04M	909.01M	603.90M	665.92M
	Total Assets
903.93M	961.23M	1.18B	1.14B	1.07B	803.99M
	Total Debt
420.69M	420.12M	417.89M	415.72M	42.48M	27.52M
	Net Debt
279.93M	241.51M	201.09M	113.43M	-482.00M	-638.40M
	Total Liabilities
631.76M	638.95M	674.04M	659.72M	174.57M	141.47M
	Stockholders Equity
272.17M	322.28M	505.48M	480.22M	894.26M	662.52M
Cash Flow		Free Cash Flow
-470.22M	-474.56M	-492.50M	-396.73M	-235.40M	-250.36M
	Operating Cash Flow
-315.39M	-352.70M	-448.19M	-380.24M	-230.76M	-233.16M
	Investing Cash Flow
100.03M	175.66M	-116.27M	-286.17M	-387.52M	-17.20M
	Financing Cash Flow
157.16M	134.34M	475.43M	459.00M	489.36M	436.59M

Virgin Galactic Holdings Technical Analysis

Technical Analysis Sentiment

Negative

Last Price3.00

Price Trends

50DMA

3.09

Negative

100DMA

3.55

Negative

200DMA

5.01

Negative

Market Momentum

MACD

-0.04

Positive

RSI

43.39

Neutral

STOCH

9.83

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 is below the 20-day moving average (MA) of 3.50, below the 50-day MA of 3.09, and below the 200-day MA of 5.01, indicating a bearish trend. The MACD of -0.04 indicates Positive momentum. The RSI at 43.39 is Neutral, neither overbought nor oversold. The STOCH value of 9.83 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 59 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 (66)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	66 Neutral	$4.47B	12.22	5.40%	3.65%	4.14%	-12.00%
SLDP	60 Neutral	$317.47M	―	-20.64%	―	3.22%	-33.20%
SPCE	48 Neutral	$125.14M	―	-95.46%	―	-34.33%	52.30%
SIDU	43 Neutral	$29.65M	―	-109.05%	―	-18.70%	84.35%
DFLI	41 Neutral	$3.14M	―	-3420.59%	―	-11.38%	-9.63%
MNTS	40 Neutral	$7.81M	―	688.16%	―	-46.28%	93.33%
NVX	40 Underperform	$169.47M	―	-47.77%	―	-27.50%	-58.61%

* Industrials Sector Average

Performance Comparison

SPCE

Virgin Galactic Holdings

3.00

-8.70

-74.36%

MNTS

Momentus

1.29

-6.13

-82.61%

SLDP

Solid Power

1.75

0.08

4.79%

DFLI

Dragonfly Energy Holdings Corp

0.30

-7.56

-96.18%

SIDU

Sidus Space, Inc. Class A

1.54

-1.06

-40.77%

NVX

NOVONIX Ltd Sponsored ADR

1.14

-0.59

-34.10%

Virgin Galactic Holdings Corporate Events

Shareholder MeetingsBusiness Operations and Strategy

Virgin Galactic Approves New Incentive and Stock Plans

Positive

Jun 10, 2025

On June 5, 2025, Virgin Galactic Holdings held its Annual Meeting of Stockholders where two significant plans were approved: the Third Amended and Restated 2019 Incentive Award Plan, and the 2025 Employee Stock Purchase Plan. The Third A&R Plan increases the number of shares available for incentive stock options and extends the right to grant awards through 2035, while the ESPP allows eligible employees to purchase shares, aiming to enhance employee engagement and ownership. The approval of these plans is expected to impact the company’s operations by potentially increasing employee investment in the company, thereby aligning employee interests with those of shareholders.

The most recent analyst rating on (SPCE) stock is a Sell with a $1.00 price target. To see the full list of analyst forecasts on Virgin Galactic Holdings stock, see the SPCE Stock Forecast page.

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.