Virgin Galactic (SPCE): Evaluating Valuation After Settlement and Strategic Spaceplane Developments

Virgin Galactic (SPCE) recently settled a $2.9 million shareholder lawsuit, clearing a key legal risk for investors. The company also announced new partnerships and revealed plans for advanced Delta Class spaceplanes.

See our latest analysis for Virgin Galactic Holdings.

Virgin Galactic’s recent string of headlines, including settling the lawsuit, securing new research partnerships, and laying out plans for Delta Class spaceplanes, brought extra attention to the company. The share price rebounded 25.5% over the last month, but looking longer term, total shareholder returns for the past year remain deeply negative at -47%. This momentum shift suggests some renewed optimism, yet the stock is still working to regain lost ground after steep declines over the past few years.

If you’re curious what other companies in aerospace and space tech are up to, now’s the perfect time to discover See the full list for free.

With shares rallying after recent positive news, the big question now is whether Virgin Galactic is finally undervalued after years of declines or if the market is already factoring in all of its future growth potential.

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

Virgin Galactic’s shares currently trade at a price-to-book ratio of just 0.9x, far below peer and industry averages, pointing toward a potentially steep undervaluation at last close of $4.08.

The price-to-book ratio tells investors how much they’re paying for the net assets of a company in relation to its market price. For an asset-heavy, early-stage company like Virgin Galactic, this measure can spotlight differences in investor expectations versus tangible book value, especially when future profitability remains uncertain.

This striking 0.9x multiple is markedly lower than both the peer average of 60.7x and the U.S. Aerospace & Defense industry average of 3.4x. The market is pricing Virgin Galactic’s equity at a sharp discount compared to its sector, fueling questions about whether this is deep value or a reflection of significant operating challenges.

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

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

However, persistent net losses and a steep five-year decline of nearly 99% remain major risks. These factors could weigh on any long-term recovery hopes.

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

Another View: SWS DCF Model Suggests Even Deeper Undervaluation

While the current price-to-book ratio points to undervaluation, our SWS DCF model paints an even starker picture. According to this approach, Virgin Galactic's intrinsic value is estimated at $112.87, which is over 27 times higher than its market price. Does this dramatic gap highlight a rare opportunity, or is it too optimistic about future cash flows?

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

Keep in mind, if you’d rather draw your own conclusions, you can dive into the data and build your personal narrative in just a few minutes. Do it your way

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

Looking for more investment ideas?

Smart investors never limit themselves to a single opportunity. Make your next move count by powering up your portfolio and uncovering fresh themes and emerging trends right now.

• Spot high-yield potential and steady income by tapping into these 18 dividend stocks with yields > 3% delivering attractive yields above 3%.
• Get ahead of major tech shifts with these 24 AI penny stocks gaining traction as artificial intelligence accelerates market disruption.
• Seize the chance to find bargains with these 878 undervalued stocks based on cash flows packed with stocks trading at compelling valuations based on cash flows.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com