The Ratings Game: For Virgin Galactic, faster revenue generation is coming — ‘just not anytime soon,’ says one analyst

by | Nov 9, 2023 | Stock Market

Virgin Galactic Holdings Inc. fleshed out its near-term growth strategy when it reported third-quarter results Wednesday, laying out the roadmap for its new Delta Class spacecraft. The Delta spacecraft will begin flight tests in 2025 and enter service in 2026. Unlike the company’s current Unity spacecraft, which has four seats for paying passengers, the Delta spacecraft will have six seats, and will be capable of making up to eight spaceflights a month, significantly more than Unity’s one spaceflight a month.

This will increase Virgin Galactic’s
monthly revenue per spacecraft from the current maximum of $2.4 million to $28.8 million, the company said. In a note released Wednesday, Truist Securities analyst Michael Ciarmoli said that for Virgin Galactic “faster revenue generation is coming … just not anytime soon.” Related: Virgin Galactic’s stock soars, company rakes in nearly $2 million in revenue from space tourism During the conference call to discuss its results, Virgin Galactic explained that it will undertake two more missions using its Unity spacecraft before pausing flights in mid-2024 to focus on developing the Delta spacecraft. Truist Securities maintained its sell rating and $1 price target for Virgin Galactic. “We still forecast significant cash burn in the coming periods along with elevated execution risk and potential future choke points around Mothership limitations,” Ciarmoli wrote. Virgin Galactic, which is exiting the third quarter with cash and marketable securities of …

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