QS Research · Michael Burry's Scion Capital analyst template · 2006
Virgin Galactic Holdings, Inc (SPCE)
As of 2026-11-09 · 12/15 boxes filled from SEC filings and market data
Conclusion: WATCH
Conviction medium · base case -88% · downside -98% · upside -30%
The market is capitalizing $419.9M of equity on $1.0M of TTM revenue and a pre-commercial spaceship program that has slipped again, not on any visible earnings power. I do not normalize earnings because operating income was negative every year FY2020-FY2025 and is -$257.5M EBIT on the TTM to Jun 30 2026, so the base case uses FY2024 peak revenue of $7.0M at 4.63x-8.11x EV/Sales plus $6.0M net cash, about $0.33 per share. The downside at 1.80x-1.99x TTM revenue is about $0.05, and even the upside at 41.14x peak revenue is $1.94, 30% below the $2.77 close. I would short: the gap to every case is large, and the dated catalysts are operational and financing events that can hurt before they help.
Key numbers
- Share price: $2.77
- Market cap: $419.9M
- Latest financial period: TTM to Jun 30, 2026
- Revenue (TTM): $1.0M
- Price / book: 1.06x
The 15 boxes
- ✓ 1. Long-form business notes
SPCE's sources describe one spaceflight business: it sells suborbital flights and research missions to private individuals, researchers and government agencies, plus occasional third-party engineering services. The FY2020 10-K shows a test-flight-stage company with ~600 reservations and >$80.0M of deposits; the latest 10-K (dated 2026-03-30) shows seven commercial flights completed by June 2024, VSS Unity paused, and next-generation ships planned for Q3 2026 test flights and Q4 2026 commercial restart. FY2025 revenue was $1.5M against a $285.3M operating loss, $240.1M operating cash burn and $198.0M capex; no TTM or quarterly figures are in the provided sources.
- ✓ 2. Competitive advantage
No durable competitive advantage is demonstrated in the sources: the Virgin brand is licensed from VEL, the roughly 675-person backlog is largely refundable, and FY2020-FY2025 show negative operating income and negative operating cash flow every year. The primary named suborbital competitor, Blue Origin, paused space tourism for at least two years, but Virgin Galactic paused Unity flights in mid-2024 and the 2026 10-K expected next-generation test flights in Q3 2026 and a first commercial research flight in Q4 2026. FY2025 revenue was $1.5M against a $285.3M operating loss, so scale, cost and switching-cost advantages are not visible.
- ✓ 3. 10-Q takeaways
The Q2 2026 10-Q is still a pre-revenue liquidity story: revenue was $0.134 million, operating loss was $(64.926) million, and the $(55.889) million net loss included an $8.639 million debt-extinguishment gain. Cash, cash equivalents and restricted cash were $218.4 million plus $67.7 million of marketable securities at June 30, 2026, but management raised substantial doubt about going concern. The same-quarter earnings release gives numeric FCF guidance: Q3 2026 $(95)-(100) million and Q4 2026 $(80)-(90) million.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ○ 11. Impression of the shareholder letter
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
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