Virgin Galactic shares yesterday lost nearly 11% and a downward move prevails today after the space-travel company posted a larger-than-expected quarterly loss. Also broad risk aversion seen on the markets puts additional pressure on companies share price. The company has a significant amount of cash needed to launch its space tourism services but has yet to launch commercial services.
- Earnings per share (EPS) -$0.36 vs -$0.32 forecast
- Revenue $300k vs $100k forecast
- Net loss $93m vs $130m in Q1 2021
- EBITDA - $77mn vs $56mn in 1Q 2021
- Virgin Galactic burned $68 million in cash in 1Q 2022, less than analysts' estimates
- The company is committed to producing the next-generation Delta spacecraft and is currently looking for suppliers. It also announced the use of 'digital twins' technology to support their future production
- The company reported its fourth consecutive quarter of revenue growth after four quarters of declines, which indicates its growing earnings capacity.
- Virgin has reported that demand for space tickets is still strong, and has so far secured nearly 800 reservations for prospective customers;
- Virgin Galactic has hired former Warner Bros global marketing manager Blair Rich as the new chief business officer. The company hired an experienced team in entertainment and marketing departments. Current CEO Michael Colglazier has been responsible for the entertainment side of the Disney parks in the past;
- Virgin Galactic's stock fell nearly 64% in 2021 compared to the 3.2% return of the S&P 500 index. The massive price rally began in May and ended in July 2021 after the successful space flight of company owner Richard Branson;
- Virgin Galactic plans to launch test flight of the VSS Unity spacecraft in Q4 2022 and informed that commercial flights have been delayed by a quarter and will begin in Q1 2023;
Analysts believe that supply chain problems are causing the delays. Robert Spingarn from Melius, said "The one-quarter delay in the start of commercial operations is largely related to delays in raw material deliveries and engineering constraints.”
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Virgin Galactic (SPCE.US) interval MN. The stock has been moving in a strong downtrend since July 2021 and is currently testing its pre-pandemic lows. If buyers manage to regain control, another upward impulse may be launched towards resistance at $20.00 which coincides with 23.6% Fibonacci retracement of the last downward wave. Of course the downward movement may accelerate due to worsening sentiment, supply chain disruptions and potential recession, however current price level may be attractive to investors who believe in the long-term potential of the company. Source: xStation5
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