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Virgin Galactic (SPCE), Aurora Team Up to Build Mothership

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Virgin Galactic Holdings, Inc. (SPCE - Free Report) recently teamed up with Boeing’s (BA - Free Report) subsidiary, Aurora Flight Services, to build two new motherships. With this agreement, the company aims to utilize the excellency of Aurora in manufacturing best-in-class air launch carrier aircraft, which will assist in taking its spaceship to its release altitude of nearly 50,000 feet.

Boeing’s Aurora boasts 30 years of experience in building cutting-edge aircraft from concept to delivery and specializes in novel aircraft configurations and complex composites.

No doubt, the expertise of Aurora will enable Virgin Galactic to scale operations and build a family of the fleet, which will enable SPCE to have 400 flights per year at Spaceport America.

Details of the Agreement

With service anticipated to commence in 2025, the new mothership will be manufactured at Aurora’s Columbus, Mississippi and Bridgeport, West Virginia facilities, while the assembly of the motherships will be accomplished at the Virgin Galactic facility in Mojave, CA.

Benefits of the Deal

With the agreement, Virgin Galactic intends to avail the benefits of the new and innovative technology of Aurora in manufacturing the fleet to enhance the efficiency of the fleet. Additionally, the company aims to utilize the productivity of the troop of the highly skilled labor of Aurora, which will further add impetus to manufacturing.

Moreover, the deal will boost faster production, easy maintenance and enhance Virgin Galactic’s capacity to fly more spaceships. Additionally, the deal will enable the company to put in its efforts in other areas of building the aircraft, such as designing, engineering and final assembling of the aircraft.

The next-generation technology will empower SPCE to carry out human travel to orbit with ease and bolster its revenue generation prospects going forward.

Price Movement

In the past year, shares of Virgin Galactic have risen 7.9% against the industry’s fall of 0.3%.

Zacks Investment Research
Image Source: Zacks Investment Research

Zacks Rank

Virgin Galactic currently carries a Zacks Rank #4 (Sell). Some better-ranked stocks from the same industry are Lockheed Martin (LMT - Free Report) and Leidos Holdings (LDOS - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Lockheed Martin expects revenues of $66 billion for 2022, while earnings per share are anticipated at $26.70. LMT boasts a long-term earnings growth rate of 5.7%.

The Zacks Consensus Estimate for Lockheed Martin’s 2022 earnings suggests a growth rate of 18.6% from the prior-year reported figure. Shares of LMT have returned 12.1% in the past year.

Leidos’ top line improved 5.4% year over year in the first quarter of 2022. LDOS expects its 2022 revenues in the range of $13.9-$14.3 billion, while adjusted earnings are anticipated in the range of $6.10-$6.50 per share.

The long-term earnings growth rate of Leidos is pegged at 6.9%. LDOS shares have appreciated 13% in the past six months.

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