Virgin Galactic on Thursday announced it had again delayed its commercial flight timeline, meaning paying customers won’t fly from New Mexico until at least 2023.
Why? Supply and demand — both in the labor market and for materials.
That’s how CEO Michael Colglazier explained the situation to investors during the company’s first-quarter earnings call on Thursday. The update came as the company makes vehicle updates to increase durability and reliability, and increase flight rates. At the same time, the company is also moving toward the production of its next-generation “Delta” line of spaceships.
“Like many companies around the world, we’re experiencing elevated levels of supply chain disruption. We have an outstanding team dedicated to managing this increasingly complex environment,” Colglazier said. “We are also growing our talent base amid a constrained labor market … our talent growth rates have not kept pace with planned ramp up.
“Our projections … suggest we may need additional schedule contingency. For this reason, we are shifting the expected commencement of commercial service of Q4 of [2022] to Q1 of [2023].”
Virgin Galactic debuted on New York Stock Exchange back in 2019 and its stock hit nearly $56 per share in June 2021. But since that time, shares have dropped by nearly 88%. Shares dropped further on Friday and closed at $6.80.
The share price started slipping last summer, especially after billionaire founder Richard Branson’s flight to the edge of space from Spaceport America last year. Branson’s Virgin Group subsequently sold off hundreds of millions of dollars worth of shares and Virgin Galactic’s flight timeline was moved to late 2022.
Seeking Alpha reported on Friday that Canaccord Genuity downgraded Virgin Galactic’s stock rating to a "hold," lowering its price target — the price at which an analyst believes a stock will be fairly valued — to $8.
