Is Virgin Galactic A Good Investment In The Space Race?

Virgin Galactic hit a new 52-week low, sending shares below its initial public offering price more than two years after its market debut.
Jan. 7, 2022
Unlock Free Stock Insights + 50% Off Discount Code!
Join thousands of savvy investors and get:
  • Weekly Stock Picks: Handpicked from 60,000 global options.
  • Ten Must-Have Stocks: Essential picks to hold until 2034.
  • Exclusive Stock Library: In-depth analysis of 60 top stocks.
  • Proven Success: 10-year track record of outperforming the market.
Sign up to our mailing list now and enjoy a 50% discount on premium services!
By submitting your email address, you consent to us keeping you informed about updates to our website and about other products and services that we think might interest you. You can unsubscribe at any time. Please read our Privacy Policy and Terms of Use.

Virgin Galactic (NASDAQ: SPCE) shareholders have been laid bare to some violent price swings amid hype and speculation since its debut. From reaching heights of $62.80 per share in February 2021, the company's stock has fallen more than 75% since, now sitting in the region of $12 per share, roughly where shares began trading two years ago. 

What does Virgin Galactic do?

Virgin Galactic is a space tourism company founded by seasoned U.K. entrepreneur Richard Branson with the company going public via one of Chamath Palihapitiya's special purpose acquisition companies (SPACs) in 2019. It offers customers a once-in-a-lifetime opportunity to travel to space -- albeit for just a couple of minutes -- and that experience comes with a hefty price tag, $450,000 per seat!

Virgin Galactic had its first successful spaceflight in July 2021 which garnered plenty of social commentary, and it now looks towards 2022 for its next batch of orbital flights. 

Virgin Galactic's Financials

Losses narrowed for Virgin in Q4 2021 to $48 million, compared with a $92 million loss in the same quarter in 2020. The company is experiencing a serious cash burn at the moment but has a strong cash position of $1 billion on hand for investment activities. Virgin has roughly 700 reservations booked so far, aiming to increase this figure to 1,000 in the future and it wants to boost the number of commercial spaceflights considerably in 2023. 

Virgin Galactic's Growth Potential

A recent report from Northern Sky Research expects 57,500 people to make their way to space over the next decade, estimating cumulative revenues of over $20 billion for the space tourism industry.

While the industry is gaining momentum, it's a very limited market opportunity, given the pricing point of flights -- it's really an experience only the ultra-wealthy can indulge in. This year will see Virgin Galactic fulfilling flights for more ticketholders but even still, timelines are extremely uncertain. Even at this rate, there could be more unexpected delays. Virgin also has competitors to worry about, the most prominent being Jeff Bezos' Blue Origin, but more and more companies are trying to get their space travel efforts up and running.

Conclusion

There's definitely no sugar-coating it. Virgin Galactic is an extremely risky offering that's not for the faint of heart -- and when it comes to a potentially game-changing opportunity like this, investors are always going to have to pay a premium, even without a concrete roadmap to future profitability.

It would be foolish for any investor to allocate more than a small percentage of a portfolio to an investment like this, but with that being said, if the company's efforts pay off, the potential rewards could be massive.


Unlock Free Stock Insights +50% Off Discount Code!
Join thousands of savvy investors and get:
  • Weekly Stock Picks: Handpicked from 60,000 global options.
  • Ten Must-Have Stocks: Essential picks to hold until 2034.
  • Exclusive Stock Library: In-depth analysis of 60 top stocks.
  • Proven Success: 10-year track record of outperforming the market.
Sign up to our mailing list now and enjoy a 50% discount on premium services!
By submitting your email address, you consent to us keeping you informed about updates to our website and about other products and services that we think might interest you. You can unsubscribe at any time. Please read our Privacy Policy and Terms of Use.

The Home of Successful Investing.

© 2024 MyWallSt Ltd. All rights reserved.

Services

Content

Social

Company

Support

Resources

This website is operated by MyWallSt Ltd (“MyWallSt”). MyWallSt is a publisher and a technology platform, not a registered broker-dealer or registered investment adviser, and does not provide investment advice. All information provided by MyWallSt Limited is of a general nature for information and education purposes, and you should not construe any such information as investment advice. MyWallSt Limited does not take your specific needs, investment objectives or financial situation into consideration, and any investments mentioned may not be suitable for you. You should always carry out your own independent verification of facts and data before making any investment decisions, as we cannot guarantee the accuracy or completeness of any information we publish and any opinions that we publish may be wrong and may change at any time without notice. If you are unsure of any investment decision you should seek a professional financial advisor. MyWallSt Limited is not a registered investment adviser and we do not provide regulated investment advice or recommendations. MyWallSt Limited is not regulated by the Central Bank of Ireland. MyWallSt Limited may provide hyperlinks to web sites operated by third parties. Your use of third party web sites and content, including without limitation, your use of any information, data, advertising, products, or other materials on or available through such web sites, is at your own risk and is subject to the third parties' terms of use.