Is There Any Hope For Virgin Galactic Stock?

SPCE is down over 80% from its all-time high

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We've come a long way since February 2021, when he Richard Branson-led Virgin Galactic Holdings, Inc. (NYSE:SPCE) traded as high as $62.80. Now more than a month removed from a record low of $6.70, is there any hope for SPCE?

Virgin Galactic stock has taken a 64% haircut in the last 12 months and 80% of that February 2021 record high. And despite a brief rally last month, the shares saw their 80-day moving average contain the breakout.

From a fundamental point of view, Virgin Galactic stock is still nothing more than speculative. At a market cap of $2.06 billion and a price-sales ratio of 676.21, to say SPCE is overvalued is an understatement. Virgin Galactic has a yet to produce any significant progress with revenues and much less with net income, having reported $3.29 million in revenue loss and $352.9 million in net loss for fiscal 2021.

Nonetheless, the space company has a strong balance sheet with $603.9 million and just $42.73 million in total debt, which should keep SPCE afloat for a couple of years. In addition, Virgin Galactic is estimated to generate $6.24 million in revenues for fiscal 2022 and $43.52 million for fiscal 2023, which would represent considerable progress. However, even if the business were to accomplish its expected growth despite all the uncertainties, Virgin Galactic stock's valuation would remain absurdly high at SPCE's current price.

 

 

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