Third Successful Launch Yesterday, Five More Scheduled for 2022, and Stock is Trading at 28% Discount



KEY POINTS
  • Virgin Orbit successfully completed its third commercial launch on January 13, 2022. Satellites for US DoD, NASA, SatRevolution, and Spire were successfully put into orbit. Launching from under the wing of its specially modified 747 launch platform at 35,000 feet, which took off and returned to the Mojave Air & Space Port, Virgin Orbit lowers risks and costs, and enables any-time, any-orbit small satellite launches.
  • With six launches planned for 2022, including the first ever launch from the U.K., Virgin Orbit looks to make its proprietary air-launch technology a disruptive force in the small satellite launch business. Plans are for two launches from Cornwall, England, and four from Mojave, Ca.
  • 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 vs. up to as many 11 engines on 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 VORB 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) Small-Satellite Launch Market—$25 billion TAM in commercial, civil, and national security launches, primarily targeting low Earth orbit; (2) 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) National Security Market—$17 billion TAM in missile defense targets and hypersonic applications.
  • Virgin Orbit estimates more than 50% of its 2022 forecast revenue is already accounted for by active contracts. The company has $2.3 billion in identified opportunities and $1.3 billion in active proposals. The long-term nature of its launch contracts, and its customer wins in 2021, give it enough confidence to publicly forecast a five-year CAGR of 166%.
  • The company’s comparables include space-based companies of a similar size and growth rate. Its comps have an average 2025e EV/EBITDA of 8.4x while VORB is trading at 6.0x, a 28% discount. Rocket Lab is the only small launch competitor to have also reached regular commercial operations, making it the best comp, but its 2025 EBITDA margin is projected to be 22%, while Virgin Orbit’s is expected to be 32%.
COMPANY OVERVIEW

Virgin Orbit has developed a proprietary air-launch technology coupled with outstanding manufacturing infrastructure and a proven team to transform space access for a diverse and global customer base. Since its founding in 2017, Virgin Orbit has developed the world’s first air-launched, liquid-fueled launch system, making it the premier dedicated satellite launch service.

The company’s second successful launch, conducted on June 30, 2021, delivered satellites for commercial and national security customers from the US and abroad directly into their target orbits. In January 2021, the company debuted its launch capability by successfully launching satellites for NASA.

Virgin Orbit uses a customized 747 aircraft as a mobile launch site, a flying mission control, and a fully reusable first stage vehicle. By beginning each mission at approximately 35,000 feet above sea level and already travelling at a high speed, the simple and reliable LauncherOne rocket achieves a significant performance advantage over grounded launch sites while reducing local carbon emissions and acoustic impacts at the launch site when compared to a traditional ground launch.

The mobility of the system also allows Virgin Orbit to bring launch capabilities to dozens of nations that currently have space agencies and satellite industries but no domestic launch capability. The company has been selected by the United Kingdom and Brazil to bring launch to those nations’ shores, in addition to Virgin Orbit’s announced launch site in Japan.

Virgin Orbit’s ability to launch responsively from any location around the world also gives it a valuable national security role in ensuring the resiliency and replaceability of critical satellite infrastructure assets.

Read all our reports on Virgin Orbit on our website.

Virgin Orbit successfully completed its third commercial launch on January 13, 2022. Satellites for US DoD, NASA, SatRevolution, and Spire were successfully put into orbit. Launching from under the wing of its specially modified 747 launch platform at 35,000 feet, which took off and returned to the Mojave Air & Space Port, Virgin Orbit lowers risks and costs, and enables any-time, any-orbit small satellite launches.

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