Virgin Galactic Quarterly Report

Better Cost Control But Investors Seek More Revenue

Shares of Virgin Galactic dropped following the space-tourism pioneer's report of a smaller-than-expected loss in the fourth quarter. While improved cost control is a positive sign, investors are eager to see an increase in revenue.

Fourth Quarter Results

Virgin Galactic reported a loss of 26 cents per share with sales totaling $2.8 million for the quarter, below Wall Street's expectations of a loss of 30 cents per share on sales of $3 million, as per FactSet data.

Market Reaction

In premarket trading, shares fell by 7.4% to $1.76, while S&P 500 and Nasdaq Composite futures dipped by 0.4% and 0.5% respectively.

Focus on Sales and Outlook

With Virgin Galactic still in its growth phase, sales hold more weight than earnings. Looking ahead, the company forecasts first-quarter revenue around $2 million, falling short of Wall Street's estimated $3.6 million.

Future Initiatives and Cash Position

Virgin Galactic completed a space flight in January and has another scheduled for the second quarter. The company closed the year with a cash balance nearing $1 billion, and analysts anticipate a cash use of under $500 million by 2024.

Analyst Insight

KeyBanc analyst Michael Leshock affirms that the company's long-term plans remain solid. Virgin Galactic's next-generation Delta-class spaceships are set to be operational by 2026, accommodating six passengers as opposed to the current four on Unity-class ships. The company plans to introduce two Delta-class ships into service, expecting eight flights per month.

Analyst Ratings and Price Target

Leshock maintains a Hold rating on Virgin Galactic stock without a specified price target. Among analysts covering the stock, only 18% have Buy ratings compared to the average S&P 500 Buy-rating ratio of approximately 55%. The average analyst price target for Virgin Galactic shares stands around $2.80.

Stock Performance

As of Wednesday trading, shares have declined about 67% over the past year.