Can Virgin Galactic Make Space Travel Profitable? - InvestingChannel

Can Virgin Galactic Make Space Travel Profitable?

Proprietary Data Insights

Financial Pros’ Top Space Exploration Stock Searches in the Last Month

#1‘Virgin Galactic Holdings Inc140
#2‘Planet Labs69
#3‘Rocket Labs8
#4‘Aerojet Rocketdyne Holdings3
#5‘Leidos Holdings3
#ad FinPros Top Researched Stocks in Q1

Virgin Galactic Hits Key Inflection Point

Financial pros’ eyeballs turned toward Richard Branson’s Virgin Galactic (SPCE) as the company confirmed its first official commercial space flight for June 29.

A three-person crew from the Italian Air Force and National Research Council of Italy will join the VSS Unity spacecraft, undertaking a 90-minute flight. Their mission focuses on conducting a series of suborbital science experiments.

Virgin Galactic hasn’t turned a profit yet. However, it’s already presold $210 million worth of tickets.

So, can this company become a viable business?

Virgin Galactic’s Business

Ready to drop $250,000 to take a trip into space? That’s the cheapest rate for a Virgin Galactic ticket.

While other companies like Space X are more interested in launching satellites and traveling to the moon, Virgin Galactic wants to put rich people into space. 

However, that’s just their ‘Human Spaceflight’ segment.

The ‘Space Services’ segment provides engineering and ensign services as well as flies folks up into space for scientific research, technology development, and education missions.

The company’s current fleet includes its VSS Unity with the Delta Spaceship in the works.

Spaceline Operations

Source: Virgin Galactic Q1 2023 Report

However, here is the math breakdown on their value proposition:

Economic Engine

Source: Virgin Galactic Q1 2023 Report

This would be awesome IF they could achieve these metrics. 

However, they currently sell seats for less than $450,000. And the VSS Unity turnaround time is one month, far below what’s need to turn profit.

Delta class ships with a one-week turnaround haven’t been developed.



Source: Stock Analysis

Virgin Galactic hasn’t made any money yet. In fact, they’ve only run test flights so far.

And they’re burning through almost $500 million annually.

No wonder they had to do a $400 million stock raise recently.



Source: Seeking Alpha

There isn’t a company that’s an apples-to-apples comparison with Virgin Galactic.

Instead, we pulled in other space travel and support-related companies.

And wouldn’t you know it, only one generates cash from operations, Leidos (LDOS), which is a services and solutions provider.

Aerojet (AJRD), the maker of rocket engines, isn’t cash flow positive, but they were every year before 2021.



Source: Seeking Alpha

What is revenue growth without positive cash flow?

Apparently, the business model for Planet Labs (PL) and Rocket Labs (RKLB).



Source: Seeking Alpha

Interestingly, all the companies are profitable on a gross margin basis.

But beyond that, SPCE, PL, and RKLB don’t make a dollar between them.

Our Opinion 0/10

Do you see a theme here? 

All the sexy startups burn investor cash.

Will they make money someday? Who knows. 

Virgin Galactic hasn’t even developed the rocket ship it NEEDS to make money.

The only thing you get with an investment in Virgin Galactic is a one-way ride for your money into outer space.

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