Virgin Galactic (SPCE): Evaluating Valuation After Fresh Losses, Cash Burn, and New Flight Delays

Virgin Galactic Holdings (SPCE) recently reported a sizeable net loss for the latest quarter, along with ongoing high cash burn and further delays to the launch of its commercial spaceflight services. These developments have reignited questions about the company’s near-term trajectory.

See our latest analysis for Virgin Galactic Holdings.

Virgin Galactic’s latest net loss and delay news come after a recently settled legal dispute and new governance measures, giving investors even more reason to weigh the risks. The 1-year total shareholder return of -29.8% highlights the heavy pressure, and while recent share price moves have been modest, momentum remains challenged as the company works to overcome these operational setbacks.

If the volatility here has you thinking about other aerospace and defense stories, now is the perfect chance to discover See the full list for free.

Given the slide in Virgin Galactic’s share price and lingering uncertainty, investors now face a key question: is the market overlooking the company’s potential, or is the current valuation already factoring in future growth prospects?

Price-to-Book of 0.9x: Is it justified?

Virgin Galactic trades at a price-to-book (P/B) ratio of 0.9x, significantly lower than both its peer group and the wider US Aerospace and Defense industry. With the latest close at $4.28 per share, this metric sends a clear signal that the market is valuing the company’s assets at a steep discount to peers.

The price-to-book ratio compares a company’s market value to its book value, or in other words, how much investors are paying for each dollar of net asset value. For a capital-intensive business like Virgin Galactic, where tangible assets and ongoing investment play a key role, the P/B ratio is often used as a baseline for valuation comparisons within the sector.

The current calculation shows Virgin Galactic’s P/B is attractive not just relative to the sector average (3.5x), but especially compared to its direct peer group (63.6x). Such a deep discount suggests that investors are skeptical about the near-term potential to turn assets into future profitability, or that they see heightened risk that is not priced into the broader industry.

See what the numbers say about this price — find out in our valuation breakdown.

Result: Price-to-Book of 0.9x (UNDERVALUED)

However, ongoing net losses and persistent cash burn could continue to weigh on sentiment, particularly if commercial launches experience additional unexpected delays.

Find out about the key risks to this Virgin Galactic Holdings narrative.

Another View: Discounted Cash Flow

While the market’s focus is on Virgin Galactic’s low price-to-book ratio, our SWS DCF model tells a different story. This approach estimates the company’s fair value based on its future cash flows. Right now, it suggests the shares are trading at a massive discount. But does this signal a true opportunity, or a risk the market sees coming?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Virgin Galactic Holdings for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Virgin Galactic Holdings Narrative

If you see things differently or want to run your own numbers, you can easily build a personal take in just a few minutes. Why not Do it your way?

A great starting point for your Virgin Galactic Holdings research is our analysis highlighting 3 key rewards and 4 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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