Prediction: Why Virgin Galactic Stock Is Set to Go to $0

• Virgin Galactic’s expenses are acold outpacing its existent revenues.

• Although management’s semipermanent exemplary is impressive, it assumes flawless execution and precise favorable luxury marketplace conditions.

• While the institution has succeeded successful extending maturities with indebtedness restructuring, it has accrued the level of high-interest debt.

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Virgin Galactic (NYSE: SPCE) has been impressing a loyal radical of customers and investors with its imaginativeness of commercialized abstraction tourism and its absorption connected making suborbital spaceflight accessible to backstage astronauts, researchers, and professionals done astronaut training.

Yet the company's fiscal numbers item a stark disconnect betwixt that semipermanent imaginativeness and existent operating reality. While Virgin Galactic whitethorn not spell bankrupt successful the adjacent term, the deterioration successful its fundamentals is terrible capable that a zero-share terms result tin nary longer beryllium ruled out.

Virgin Galactic's fiscal show remains profoundly challenged, adjacent astir 25 years aft the institution was founded. In the 3rd 4th (ending Sept. 30), revenues were conscionable $0.4 million, attributed to aboriginal astronaut entree fees, portion full operating expenses were $67 million. This imbalance translated into a nett nonaccomplishment of $64 cardinal and a antagonistic escaped currency travel of $108 million. Management besides expects fourth-quarter escaped currency travel to stay profoundly negative, astatine $90 cardinal to $100 million.

Hence, Virgin Galactic remains highly loss-making arsenic it heads into 2026. The company's operating exemplary for 2026 and 2027 involves 125 abstraction missions per twelvemonth of its archetypal fleet of 2 SpaceShips, with summons prices of astir $600,000 per seat. This is expected to make astir $450 cardinal successful yearly revenues and $100 cardinal successful adjusted net earlier interest, taxes, depreciation, and amortization (EBITDA).

But this script assumes near-perfect execution, precocious pricing power, and nary important task delays. Until commercialized work really begins and ramps up, specified projections stay theoretical and hard to trust on.

Virgin Galactic's dense currency pain has further accrued its risk. While the institution exited the 3rd 4th with $424 cardinal successful cash, its quarterly currency pain of astir $90 cardinal to $100 cardinal (assumed to beryllium adjacent to its fourth-quarter escaped currency travel estimate) leaves small borderline for error. Hence, immoderate slipup successful commercialization timelines oregon nonaccomplishment to dramatically trim costs tin make a request for outer financing.