Breaking News
Investing Pro 0
Cyber Monday SALE: Up to 54% OFF InvestingPro+ CLAIM OFFER

Virgin Galactic Slips as Bernstein Cuts to Underperform, Analyst Less Certain Business Will Succeed

Stock Markets Sep 09, 2022 09:44AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters Virgin Galactic (SPCE) Slips as Bernstein Cuts to Underperform, Analyst Less Certain Business Will Succeed
 
SPCE
-6.88%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

By Senad Karaahmetovic

Shares of Virgin Galactic (NYSE:SPCE) are down 4% today after Bernstein downgraded to Underperform from Market Perform with a $4 per share price target, down from $7.00.

An analyst said the rating cut was fueled by the continuous delay of future flight operations, maintenance work on the platform, and a need to raise more funding as cash burn continues to rise.

“Since we launched coverage in early 2021, the first commercial flight for private citizens has been pushed back by two years to Q2 2023 and more than $1.2bn in cash has been raised in two equity rounds and a convertible bond offering,” he told clients in a note.

Moreover, the analyst also noted a difficult macro environment where higher interest rates are hiring valuations of early-stage companies.

“The fall in the SPCE share price makes the stock less attractive as a currency for share-based employee compensation. Future equity sales look to be highly dilutive,” the analyst added.

Even more worryingly, the analyst says he doesn’t see a “next thing,” a catalyst that could drive long-term growth in the 2030s.

“We now have less confidence in the success of this business. We previously saw potential for high operating cash generation, but with substantial risk. In our view, risks grew significantly during the last 18 months,” the analyst concludes.

Virgin Galactic Slips as Bernstein Cuts to Underperform, Analyst Less Certain Business Will Succeed
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email