Virgin Galactic Q4 Earnings Preview: Analyst Estimates, Flight Frequency Concerns — Could Recent Moon Landing Provide Boost For Shares?

Space company Virgin Galactic Holdings Inc SPCE is set to report fourth-quarter financial results after market close Tuesday.

Here are the key earnings estimates, what analysts are saying and key items for investors to watch.

Earnings Estimates: Analysts expect Virgin Galactic to report fourth-quarter revenue of $2.98 million, according to data from Benzinga Pro.

The company reported $869,000 in revenue in the fourth quarter of last year and beat analysts' estimates for revenue in two consecutive quarters and eight of the last 10 quarters.

Analysts expect the space company to report a loss of 30 cents per share in the fourth quarter, which would be an improvement from the loss of 55 cents reported in last year's fourth quarter. For earnings per share, Virgin Galactic beat estimates from analysts in the last two quarters and a total of only three of the last 10 quarters.

Guidance from the company called for fourth-quarter revenue to be $3 million.

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What Analysts Are Saying: The pause of space flights by the company to conserve cash led to a rating downgrade and price target decrease from Morgan Stanley analyst Kristine Liwag in November.

Liwag downgraded shares of Virgin Galactic from Equal-Weight to Underweight and lowered the price target from $4 to $1.75.

The analyst said the space company had "proven out" the concept of space tourism with its previously completed flights, but the pause of flights impacted the rating and price target.

"We see SPCE's latest decision to now scale back near-term flight activity and prioritize development/production of its Delta-class fleet as prudent, and view capital preservation efforts supporting the longevity of the business," Liwag said.

Liwag called the upcoming years for Virgin Galactic a "catalyst-light period" given only two flights are planned for the first half of 2024.

In January, Truist Securities upgraded the stock from Sell to Hold and raised the price target from $1 to $3.

Key Items to Watch: One of the many items investors will be watching for Virgin Galactic's financial results could be an update on its flight schedule for 2024 and beyond. The company highlighted its progress in 2023 during its third quarter results, but has since cut back the number of space flights.

"With six spaceflights successfully completed in under six months, Virgin Galactic has demonstrated the repeatability of our spaceflight system and also showcased the overwhelming positive experience of our Astronauts," Virgin Galactic CEO Michael Colglazier said.

Virgin Galactic completed its 11^th spaceflight in January and has one flight planned for the second quarter of 2024.

One item that could impact upcoming spaceflights by the company is an issue that was reported to the FAA. The company shared in February that a post-flight review found an alignment pin detached from the Mothership during its January flight.

Investors could also be ready for an update from the company on how many reservations it has from customers and how the reservation process and pricing is progressing.

The space industry could see increased interest after Intuitive Machines LUNR recently had a lunar lander land on the moon, America's first in over 50 years.

Investors and analysts also likely want an update on where the company stands on cash and liquidity. A report in December suggested that company founder Richard Branson wasn’t ready to put more money into the company.

ETF To Watch: Virgin Galactic is the 13th largest holding in the Procure Space ETF UFO, an ETF that offers investors exposure to the growing space sector. The ETF includes companies engaged with satellites, GPS, space exploration, space tourism and more.

SPCE Price Action: Virgin Galactic shares are up 5.06% to $1.87 on Tuesday versus a 52-week trading range of $1.38 to $6.17. Shares of the space company are down 66% over the last year.  

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Photo: Galactic O6, Lina earth view, courtesy Virgin Galactic