1. Virgin Galactic Holdings, Inc. (NYSE:SPCE)
Average Share Price Upside Potential as of January 16: 379.77%
Number of Hedge Fund Holders: 9
Virgin Galactic Holdings, Inc. (NYSE:SPCE) is an aerospace and space travel company, offering suborbital space flights for space tourists, researchers, and government agencies. The company’s operations also include the design, manufacturing, testing, and maintenance of its spaceflight system vehicles.
On November 6, SPCE provided its quarterly business update and declared financial results for the third quarter of fiscal 2024. CEO Michael Colglazier announced that the company’s spaceship program was on track to begin commercial operations in 2026. Virgin Galactic Holdings, Inc. (NYSE:SPCE) is also making progress on the Delta Program and is shifting to designing its new ‘mothership’ which is expected to accelerate growth for the company ahead.
SPCE flew its last batch of tourists to space this past June and has not flown a single customer since, as it has paused commercial space flights to focus on the production and testing of new Delta-class spaceplanes. This has impacted the company’s revenue, which was posted at a mere $0.4 million during the third quarter of 2024, dropping from $1.7 million in the prior year’s quarter.
With no flights happening, Virgin Galactic Holdings, Inc. (NYSE:SPCE)’s operating expenses also experienced a sharp decline. However, the company has been spending heavily on development efforts to boost space tourism. As a result, it made a net loss of $75 million during a quarter and had a cash burn rate of $118 million.
Despite that, Virgin Galactic Holdings, Inc. (NYSE:SPCE)’s liquidity position remains strong. It ended the quarter with $744 million of cash, cash equivalents, and marketable securities. It grew its share count by issuing 4.9 million shares of common stock, generating $37 million in gross proceeds.
With commercial flights set to resume in 2026, the company has just about enough time to sustain the ongoing cash burn rate, before operations resume. While Wall Street analysts have a consensus Hold rating for the stock, they anticipate a massive uptick in Virgin Galactic Holdings, Inc. (NYSE:SPCE)’s share price ahead.
Overall, SPCE ranks first among the 10 Best Space Stocks To Buy According To Analysts. While we acknowledge the potential of space companies, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than SPCE but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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