Virgin Galactic Holdings Inc. is poised to experience a substantial increase in cash flow with the debut of its new Delta-class spacecraft in 2026, according to T.D. Cowen analyst Oliver Chen. In a recent note, Chen described Virgin Galactic SPCE, -4.60% as “the new spaceline community blasting off to positive cash flow in mid-2026.”
The company has recently concluded the second-to-last mission of its Unity spacecraft, after which it will temporarily suspend commercial operations to focus on developing the new Delta-class vessel. Flights are expected to resume in mid-2025 with a Delta flight test, and the new spacecraft will enter service in 2026.
Four Private Astronauts Embark on Galactic 06 Flight
The Advantages of the Delta Spacecraft
Offering six seats and the capability to conduct up to eight spaceflights per month, the Delta spacecraft significantly surpasses Unity’s capacity of one spaceflight per month. Virgin Galactic expects this enhancement to generate substantial benefits, increasing their monthly revenue potential from the current maximum of $2.4 million to an impressive $28.8 million, as disclosed by the company in November.
As Virgin Galactic progresses towards the launch of its Delta-class spacecraft, the future looks promising for the company’s cash flow and space tourism community. With an anticipated boost in flights and revenue, the exciting era of regular commercial space travel draws nearer.
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Virgin Galactic: A Leader in Space Tourism
Virgin Galactic, a prominent player in the emerging space tourism industry, has sold an impressive 800 seats, highlighting its substantial growth potential. With a first-mover advantage and significant barriers to entry, the company is well-positioned for success.
One of Virgin Galactic’s key differentiators is its commitment to a holistic experience for customers. This includes frequent pre and post-flight community engagement, seamless integration of friends and family, and an immersive 360-degree Spaceport experience. Furthermore, Virgin Galactic places a strong emphasis on luxury, ensuring elevated details and prioritizing safety, training, and complete flight preparedness.
The company’s main competitor, Blue Origin, founded by Jeff Bezos of Amazon.com Inc., pales in comparison to Virgin Galactic. With an attractive horizontal takeoff system, a transparent pricing structure (unlike Blue Origin’s private auction), and a clear focus on curating a luxury experience, Virgin Galactic outshines its rival.
Virgin Galactic has already achieved impressive sales, with 777 tickets sold out of the available 800. If the remaining 200 tickets are also sold, the company will have a backlog of passengers. To accommodate this demand, approximately 130 VSS-Delta flights or 163 flights with two VSS-Delta at full capacity would be required. This backlog could potentially be cleared in just 10 to 11 months.
In its fiscal third-quarter results, Virgin Galactic reported revenue of $1.73 million. The company anticipates generating approximately $3 million in the fourth quarter. With $1.1 billion in cash, cash equivalents, and marketable securities at the end of the third quarter, Virgin Galactic is well-capitalized. These funds will be used to bring the first two Delta ships into service and achieve positive cash flow by 2026.
T.D. Cowen has expressed optimism for Virgin Galactic, giving the company an outperform rating and setting a price target of $2.50. Among the 11 analysts surveyed by FactSet, two analysts have a buy rating, five have a hold rating, and four have an underweight or sell rating for Virgin Galactic’s stock.
Virgin Galactic Shares Experience a Drop
Virgin Galactic, a prominent spaceflight company, suffered a decline in its shares on Monday, with a decrease of 4.1%. This surpasses the decline of the S&P 500 index, which only experienced a 0.3% drop. Unfortunately, Virgin Galactic’s stock has witnessed a significant decrease of 72% in the past 52 weeks, while the S&P 500 index has managed to achieve a gain of 20.3%.
