SPCE: Tracking to plan...possible make or break window over next 6-9mo; Reit PP

Research evidence excerpt

SPCE: Tracking to plan...possible make or break window over next 6-9mo; Reit PP

May 14, 2026

Investment Conclusion

Investing in space is not for the faint of heart and the same can be said for Virgin Galactic (SPCE) which remains a

high-risk but potentially high return option for those interested in commercial space. With the company still generally

in the pre-revenue stages with high costs and cash usage, share performance has been quite volatile. To this point,

shares are down 10% on the year against a mixed backdrop for Aerospace & Defense (space names have seen strong

momentum though) and and with the S&P 500 up ~10%. That said, shares are up 20% this month/so far in 2Q.

Assuming the company is able to consistently operate space flights through 2027 and into 2028, they appear to have

a path to profitability and cash generation. It has not been an easy road for VG and we're not ready to call it clear

sailing yet. With another year of cash burn in 2026 (~$300M) and risks remaining on the production of their new

spaceships, we're continuing to take a more conservative valuation approach and are reiterating our Peer Perform

rating on SPCE shares. Looking at our 2028 EBITDA estimate of ~$170M and assuming a MSD multiple we see a

fair value for shares of ~$3 which does not currently allow for significant upside.

Upside to shares would come alongside higher confidence in the path to not just commercial service, but more

importantly to the turn in profitability/FCF in ’27/28. Downside would be further slippage in the company’s progress

to commercial operations and the introduction of the Delta class.

Figure 1 - SPCE Implied Fair Value Figure 2 - Valuation Heatmap

Target Multiple 6x Current Price EV/EBITDA

EBITDA Estimate 170.5 2028 Estimate 2.88 3 2 4 6 8 10