Back on Friday, Virgin Galactic (NYSE:SPCE), one of the only space tourism firms around, made huge gains to the point where it had its best day ever. The company was up almost 39% on about 12 times normal trading volume, as the company seemed to target the July 4 weekend for its first flight with passengers into space. With gains like that on Friday, a little profit-taking should be expected, and it seems to have arrived with today's trading so far. Meanwhile, a new development from the analyst community gave Virgin Galactic extra fuel, joining a chorus of positive outlook.
Virgin Galactic Might Target July 4 Weekend For First Flight
Virgin Galactic, according to its CEO, Michael Colglazier, already had a commercial license, and had one since 2016. That license allowed the company to conduct spaceflights, as well as fly “spaceflight participants,” according to Federal Aviation Administration (FAA) language. A spaceflight test last month was the critical point that allowed two major FAA milestones to be cleared and the way opened up to carry passengers into space. Those last two milestones were connected to inertial navigation and flight control systems, reports note.
The latest development, though, allows them to carry commercial passengers whenever the company is ready to do so. That may occur much sooner than anyone expected. Blue Origin, the spaceflight company owned by Amazon (NASDAQ:AMZN) head Jeff Bezos, is looking to launch Bezos himself into space July 20. However, with Virgin Galactic's FAA approval in hand, word has emerged suggesting that Richard Branson means to get there first. The target date is even the July 4 weekend.
Earlier word from Virgin Galactic noted the company was set to start flying paying passengers in the early days of 2022. That plan called for three flights in sequence; one with four passengers to test the cabin, the second with Branson himself, and the third featuring members of the Italian Air Force, who would receive astronaut training therein. The move to juggle the scheduling of Branson's flight came after word of Bezos' plans.
Regardless of the launch order, the ultimate goal is to create a new mode of transportation. This will not only be effective in establishing space tourism, but also a new brand of commercial air travel that's much faster than current alternatives. Space tourism alone may prove an effective revenue stream—current reports suggest ticket prices into space will run $250,000 each—but Virgin Galactic's upcoming line of aircraft, capable of speeds up to Mach 3 (three times the speed of sound) could turn a flight from Los Angeles to Tokyo into a four-hour trip, down from the original 12 hours.
What Are Financial Analysts Saying About Virgin Galactic?
The possibilities are substantial for Virgin Galactic stock, and the broader financial analyst community—based on our latest research—seems to recognize such itself. Virgin Galactic currently carries a consensus rating of “buy”, though some analysts call for caution.
A year ago, Virgin Galactic had two “buy” ratings and one “hold”. Six months ago, that surged to six “buy” ratings and three “hold”. Today, we stand at nine “buy” ratings and five “hold”. While “buy” ratings are on an upward trend, so too are hold ratings. In fact, the ratio of “buy” to “hold” has held very stable for the last year; much of the last year has featured “buy” at about two to one over “hold”; March 2021 had the best ratio for the company, where “buy” was ahead of “hold” by nearly three to one, suggesting a positive outlook for the Virgin Galactic stock forecast.
Price targets are in a fairly narrow range, with a current average Virgin Galactic share price of $34.86 bookended by a high of $50 and a low of $20. With Virgin trading over $50 in today's trading so far, though, there's some downside potential involved and some profit-taking seems to be kicking in.
Recent developments have generally been positive for Virgin Galactic; Friday featured Goldman Sachs raising its price target to the current low, going from $18 per share to $20. A month prior featured many more developments, including Canaccord Genuity initiating coverage on the company as a “buy” at $35 per share, Alemic Global Investors upgrading from “neutral” to “overweight” with no price target, and Sanford C. Bernstein boosting its price target from $18 to $27.
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