Wolfe on Virgin Galactic (SPCE): 'Plans to reach space again are holding to plan but risks remain'

Wolfe Research analyst Myles Walton reiterated a Peerperform rating and {REMOVEPT} price target on Virgin Galactic (NYSE: SPCE).

The analyst comments "Investing in space is not for the faint of heart and the same can be said for Virgin Galactic (SPCE) which remains a high-risk but potentially high return option for those interested in commercial space. With the company still generally in the pre-revenue stages (again) with high costs and cash usage, share performance has been quite volatile. To this point, shares were down 9% into earnings today which came on the back of a larger unwind in the market (S&P 500 was down 1.7%). Today's move puts shares down 40%+ on the year, making it the biggest laggard in our coverage, and putting it well below the S&P 500's 15% increase. Assuming/once the company is able to consistently operate space flights, they appear to have a path to profitability and cash generation but with another year of cash burn ahead in 2026 (we see them burning another $250M+ on top of $400M+ in '25 which compares to their market cap of ~$200M) and risks remaining on the production of their new spaceships, we're continuing to take a more conservative valuation approach and are reiterating our Peer Perform rating on SPCE shares. Looking out to 2027, we're modeling EBITDA of ~$60M and assuming a ~10x multiple and YE26 net debt north of $350M would support limited upside from current levels. Upside to shares would come alongside higher confidence in the path to not just commercial service, but more importantly to the turn in profitability/FCF in ’26/27. Downside would be further slippage in the company’s progress to commercial operations and the introduction of the Delta class."

For an analyst ratings summary and ratings history on Virgin Galactic click here. For more ratings news on Virgin Galactic click here.

Shares of Virgin Galactic closed at $3.31 yesterday.

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