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The company pulled a test flight out of Q4 2021, rescheduling it until the completion of a “planned enhancement program for VMS Eve and VSS Unity,” two of its vehicles. They also announced that their commercial service is “now expected to commence in Q4 2022,” from a previous target of commencing in 2022.
Michael Colglazier, Chief Executive Officer of Virgin Galactic, said: “The re-sequencing of our enhancement period and the Unity 23 flight underscores our safety-first procedures, provides the most efficient path to commercial service, and is the right approach for our business and our customers.”
Reacting to the news, Bank of America’s Ronald Epstein dropped his price target on the company to $20 from $25, maintaining an underperform rating, and said: “Commercial operations are still expected by the end of 2022, however, we are uncertain about the company’s ability to forecast such a future and unknown event after the recent failure to call the timing right on a relatively-known short-term event.”
Meanwhile, per StreetInsider, Truist analyst Michael Carmoli reiterated a buy rating and a $50 price target but acknowledged “a general lack of catalysts over the next 12 months could keep the stock range bound.”
Virgin Galactic went public via a SPAC run by noted investor Chamath Palihapitiya in late 2019, and has traded on excitement around space travel (for example) as well as meme stock momentum at times. At today’s trading levels, the stock is down 13% for the year and 67% from 52-week highs.
The company still sports a $4.8B enterprise value despite being largely pre-revenue, with $571K in revenue in the first half of the year, illustrating the excitement around space travel and the high expectations for the company.
