Event Occurrence
Today witnessed an upward trend in Virgin Galactic's stock price.
Shares of Virgin Galactic (SPCE dropping by 1.67%) are experiencing a surge on Monday, registering a 8.9% increase as of 12:05 p.m. ET. It's not complicated to pinpoint the reason behind this rise.
So What
Tuesday arrives as the earnings day, and investors are carrying optimistic sentiments. Analysts have established a modest benchmark for Virgin Galactic's Q2 report. According to records from Yahoo! Finance, to surpass expectations, the company only needs to post a lower loss than $0.51 per share and generate income exceeding $2.7 million.
The earnings figure might not present a significant challenge. After all, in Q2 last year, Virgin Galactic reported a loss of $0.43 per share. Even if the company fails to better its performance by 19% in Q2, this would still be considered a triumph.
Achieving the revenue goal might be a more challenging endeavor. During the year-ago quarter, Virgin Galactic garnered just $357,000 in revenue. In order to reach $2.7 million, there would be a substantial 6.5-fold increase in quarterly revenue. It's true that the company successfully completed one revenue-generating commercial space tourism flight in Q2 (in June), but it has yet to launch two such flights. The second flight, Galactic 02, is scheduled for takeoff in August.
Considering the estimated $200,000 price per ticket for three paying passengers on the first flight (Galactic 01), the revenue generated could only amount to as little as $600,000.
Now What
Did Virgin Galactic find a way to transform $600,000 worth of straw into $2.7 million worth of gold? The answer remains a mystery. The Galactic 01 spaceflight in June was performed for the Italian Air Force and included their astronauts as passengers, which might have resulted in additional revenue beyond the ticket cost.
We'll need to wait until Tuesday to discover precisely how much more Virgin Galactic collected for this flight. The silver lining is that as we accumulate more knowledge about the company's revenues and profit margins, we'll be better equipped to predict when Virgin Galactic may finally turn a profit.
The optimistic sentiment among investors ahead of Tuesday's earnings report suggests they believe Virgin Galactic can surpass the modest financial expectations set by analysts, potentially leading to positive movements in the company's stock price. Successfully launching the Galactic 02 space tourism flight in August could significantly boost Virgin Galactic's Q2 revenue, providing a much-needed investment opportunity in the realm of finance and space tourism.
