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Investing.com -- In a note to clients this week, Bernstein analysts warned of further downside for Virgin Galactic following the company’s second-quarter results, citing high cash burn and delays in the flight ramp.
“Cash burn for the quarter was $114mn (consensus $109mn), slightly improved from $122mn in Q1, but still remains significantly above the target of below $100 million,” Bernstein said, noting that the company expects quarterly cash burn to fall to between $100 million and $110 million in Q3 before dipping below $100 million in Q4.
Virgin Galactic plans to commercialize its Delta class spaceships in the fall of 2026, while the launch of its research ship program has been pushed from summer 2026 to fall 2026 due to fuselage issues.
The company also initiated the design phase of its next-generation mothership, LVX, intended to increase flight frequency but adding to cash demands. SPCE plans to reopen ticket sales at $600,000 per seat in the first quarter of 2026.
The firm raised $56 million from an at-the-market equity offering in Q2, leaving it with $508 million on hand, though Bernstein cautioned that the company continues to burn roughly $100 million per quarter.
“Cash demand appears to remain high, and we have adjusted the Capex build-out and equity raise schedule in our model to incorporate this,” the note said.
Bernstein rates Virgin Galactic Underperform, and lowered its price target for the stock to $2 from $3.
“The lower target is based on our DCF model, with a higher cash burn and slower flight ramp than before,” the analysts wrote. They highlighted “substantial risk, given cash requirements, level of current resources and timing of the flight ramp,” indicating continued pressure on the stock.