What happened
Virgin Galactic Holdings (SPCE 2.39%) is out with earnings and though very little money is coming in, the company's financial position is on the upswing. That's helping rocket the shares more than 10% higher on Wednesday morning.
So what
Space tourism start-up Virgin Galactic hasn't had much to show for its efforts so far, launching founder Richard Branson into space last summer but then suffering a series of setbacks that has delayed commercial launch. The company's fourth-quarter results were a reminder of its current position: Virgin Galactic lost $0.31 per share on revenue of just $141,000.
Image source: Virgin Galactic.
Analysts had been expecting a loss of $0.34 per share on $330,000 in revenue.
The important thing for investors isn't the numbers, but rather the progress made getting operations up and running. And on that measure the release was great news, with CEO Michael Colglazier saying, "We remain on track and on schedule to complete our enhanced program and launch commercial service later this year."
Virgin Galactic finished the year with $931 million in cash, up from $679 million at the end of 2020.
NYSE: SPCE
Key Data Points
Now what
Even with Wednesday's jump, Virgin Galactic shares are still off more than 80% since Branson's historic ride. Continued caution is advised. Even if Virgin Galactic gets airborne before year-end as it hopes, there are still questions about the total size of the space tourism market and the long-term economic viability of the offering.
If it all comes together, Virgin Galactic could still end up being a big winner for investors. But given the risks and the uncertainty involved, this stock at best should remain a small part of a well-diversified portfolio. The rocket ship is heading in the right direction, but there is still a long way to go from here.
