Strong 1H22 Points to Future Successes



KEY POINTS
  • With the world’s first air-launched, liquid-fueled launch system, Virgin Orbit is disrupting the satellite launch market and is projected to grow revenues to more than $2 billion by 2026. 1H22 has seen 100% mission success for its two launches—for Spire Global, the US Department of Defense (DoD), and Poland’s Sat Revolution in January, and the US Space Force in July. It also signed significant international customers, including Oman, Poland, and the UK. Earnings are expected to be announced the second week in August.
  • Revenue per launch is expected to grow from ~$2.5 million to $6-12 million in the near term. This is a key indicator that the volume ramp and move out of early development launches are starting to show great profitability.
  • The UK launch, the country’s first, will be from Spaceport Cornwall later this year. The company expects to launch up to 17 rockets from Cornwall by 2030. The launch window is from September 29 to December 28, with the primary launch slot at the end of September.
  • Virgin Orbit’s design advantages over its competitors include: (1) quickly launching from anywhere at any time; (2) higher reliability as evidenced by its commercial launch records and simpler propulsion system (two engines versus up to as many 11 engines for competitors); (3) lower cost, weather flexibility, and longer-range capabilities; and (4) significantly lower environmental impact. No other provider can offer these capabilities, leading to markets that only Virgin Orbit can service.
  • The company operates in three markets and its $72 billion TAM is part of a growing $1.1 trillion space economy. Its markets include: (1) the Small-Satellite Launch Market—$25 billion TAM in commercial, civil, and national security launches, primarily targeting low Earth orbit; (2) the Space-Based Connectivity Market—$30 billion TAM in specialized Internet-of-Things (IoT) applications like ship management, pipeline monitoring, intelligent agriculture, and connected aircrafts; and (3) the National Security Market—$17 billion TAM in missile defense targets and hypersonic applications.
  • The company’s comparables are space-based companies of a similar size and growth rate. Its comps have an average 2025e EV/EBITDA of 3.2x, while VORB is priced at 2.5x, a 20% discount. Virgin Orbit’s 2025 estimated EBITDA margin of 32% would make it significantly more profitable than Rocket Lab at 22%, the best comp to Virgin Orbit.
OUR INSIGHTS

The Opportunities

Virgin Orbit’s unique air-launch system could propel it into becoming a disruptive leader in a $72 billion market. The significant design advantages (particularly anytime/anywhere/any orbit), its proven capabilities, and its reception by customers have given management the confidence to project 2026 revenues of more than $2 billion. The stock is valued at a 20% discount to its peers on 2025e EV/EBITDA.

Internationally, the opportunities continue to expand. The UK, Japan, Brazil, Oman, and Poland have all signed on, but there are many more space agencies than countries with launch sites—roughly 80 versus 15. Virgin Orbit is the only provider than can launch from any airport that can handle a 747.

The company has added to its National Systems effort with key board additions. The potential for military contracts has grown as the Ukrainian War has continued.

The Obstacles

As the technology has been shown to work, it is now execution that is the biggest obstacle. The critical element will be controlling its supply chain, while ramping up production to meet the increased demand (for international and military customers). Virgin Orbit’s high profile means any failures could be public and failures by others in its industry could affect its brand and stock negatively.

Read our reports and view our videos about Virgin Orbit on our website.

With the world’s first air-launched, liquid-fueled launch system, Virgin Orbit is disrupting the satellite launch market and is projected to grow revenues to more than $2 billion by 2026. 1H22 has seen 100% mission success for its two launches—for Spire Global, the US Department of Defense (DoD), and Poland’s Sat Revolution in January, and the US Space Force in July. It also signed significant international customers, including Oman, Poland, and the UK. Earnings are expected to be announced the second week in August.

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