Many investors regard Virgin Galactic(NYSE:SPCE) as the first publicly traded space tourism company. So far this year SPCE stock is up about 37%, but that number tells only half the story of the spaceflight companys shares.
Source: Christopher Penler / Shutterstock.com
SPCE is part of Sir Richard Bransons Virgin Group. He had previously foundedVirgin Atlantic Airwayswhich itself is owned in part byDelta Air Lines(NYSE:DAL). Bransons Virgin Galactic went public via a reverse merger in October 2019 at an opening price of $12.34. On Feb. 20, SPCE skyrocketed to an all-time high of $42.49.
Since then it has been volatile with a downward bias like so many other stocks. It now sits below $16, a decline of about 57% from its February peak.
Broader indices have been buoyed in recent weeks by potential positive news regarding the gradual lifting of the novel coronavirus lockdown as well as the hopes for the development of an effective vaccine. However, as states and businesses are looking to return to some form of normality, questions are also emerging as to whether there may be a second wave of Covid-19 infections.
Therefore, there may be some short-term profit-taking in SPCE stock. Yet investors with a long-term horizon whose portfolios can also weather further volatility may consider buying into the shares of this exciting venture.
According to recent research by of Scott Winter and Justin Trombley of Embry-Riddle Aeronautical University, Technological advancements in space travel have brought the concept of private, commercial space transportation closer to reality. Companies such as Blue Origin and Virgin Galactic are working to offer commercial, low orbit space flights to paying customers, and SpaceX is even considering private trips to Mars.
Virgin Galactic defines itself as the worlds first commercial spaceline and vertically integrated aerospace company.
On a side note, InvestorPlace readers may also be interested to know that Blue Origin is fully funded by Jeff Bezos, CEO of Amazon(NASDAQ:AMZN). Similarly SpaceX is the brainchild of Elon Musk, CEO of Tesla(NASDAQ:TSLA). Each of these three businesses have different structures and financing approaches to commercial space flight.
Going forward, SPCE management plans to run a regular schedule of spaceflights for private individuals and researchers from its operational hub and spaceport in New Mexico.
Within this new decade, space tourism could become a market of $3 billion. And by default, the prospects for SPCE stock could berisky, yet exciting and rewarding.
However, Virgin Group is about to sell 12% of its stake in Virgin Galactic. The aim is to free up capital to financially support the groups other travel and tourism related businesses, especially Virgin Atlantic Airways, which has been adversely affected by the viral outbreak.
This sale is likely to put pressure on SPCE stock price. In the coming months, Branson may have to sell even more shares to save Virgin Atlantic Airways.
On May 5, SPCE released its financial results for the first quarter. It was the second quarterly report as a public company.
The company reported revenues of $238,000, generated by providing engineering services, and net loss of $60 million. It reported having cash and cash equivalents of $419 million as of March 31.
In comparison, in the fourth quarter of 2019, SPCE reported revenues of $529,000 and a net loss of $73 million. So in Q1, Virgin Galactic managed to narrow the losses by $13 million.
The companys reusable suborbital vehicles are designed to reach space altitudes on frequent, affordable, and safe suborbital voyages. Each ship will have two pilots. Virgin Galactic plans to carry up to six passengers in its spacecraft at a time, charging $250,000 per person. As of April 29, more than 9,100 signed up to express interest.
Before the Covid-19 pandemic, Virgin Galactic was aiming for completing the worlds first commercial spacecraft into suborbital space in 2020. Now, that timetable does not look so clear, it said.
The full impact of the COVID-19 pandemic on the Companys full year financial results and test flight program will depend on future developments, such as the ultimate duration and scope of the outbreak, the timing and impact of future stay-at-home orders and other government mandates, and the pace at which the Company can resume normal course operations.
Thus, itd be highly difficult to assume that passengers would be able to attend a pre-flight training or travel to space for fun in the coming months.
In the past decade, space tourism became a topic of media interest, in part due to the technological developments in the aerospace sector and in part due to reduced costs of access to space. And with the 2019 IPO of Virgin Galactic, now it is part of investor interest.
However, as a result of the global pandemic, many businesses and states have had to shut down or decrease operations to a bare minimum. It will be a while before anyone is going anywhere, including space, for pleasure. Virgin Galactics space tourism timetable looks questionable at this point.
Its be likely that we can expect a delay of at least several months or even a year for the first flight into space. I do not expect SPCE stock to go back to the February highs any time soon.
However, if youre ready to buy into the space story and are happy to wait several years, then SPCE stock may be appropriate for your portfolio and you may consider buying the dips. Id be consider investing as the price goes toward $12.50.
TezcanGecgilhas worked in investment management for over two decades in the U.S. and U.K. In addition to formal higher education in the field, shehasalso completed all 3 levels of the Chartered Market Technician (CMT) examination. Her passion is for options trading based on technical analysis of fundamentally strong companies. She especially enjoys setting up weekly covered calls for income generation.As of this writing, she did not hold a position in any of the aforementioned securities.
Read more here:
- Watch the Virgin Galactic Spaceship Soar at the Edge of Space - Robb Report - May 24th, 2021
- Travelling Through a Wormhole in Space May Be Possible, New Research Suggests - Gadgets 360 - May 24th, 2021
- As Interest In Space Tourism Booms, New Research Shows What May Happen To The Body In Space - Forbes - May 24th, 2021
- Space exploration China lands a rover on Mars - The Economist - May 24th, 2021
- A Serene Shore Resort, Except for the SpaceX Ball of Fire - The New York Times - May 24th, 2021
- ETF Battles: Want to Invest in Space Travel and Exploration? Try these 3 ETFs - TheStreet - May 24th, 2021
- Stronger together: Moving from space exploration to nuclear utilities - Modern Diplomacy - May 24th, 2021
- The ARKX ETF: Investing in the Final Frontier - ETF Trends - May 24th, 2021
- Heres how NASA will search for water on the Moon - Yahoo Entertainment - May 24th, 2021
- What We Know About Chinas Mars Rover Zhurong Landing - The New York Times - May 24th, 2021
- China says Martian rover takes first drive on surface of Red Planet - Reuters - May 24th, 2021
- An aspiring Irish astronaut is currently on a simulated moon mission - Siliconrepublic.com - May 24th, 2021
- To the moon...literally: Should you buy into the future of space travel? - Global Banking And Finance Review - May 24th, 2021
- SpaceX's dearMoon mission has pitted two brothers against each other. One of the siblings said he was shocked - Business Insider India - May 24th, 2021
- Virgin Galactic Shares Rocket Higher: What Investors Should Know - Benzinga - May 24th, 2021
- Warp Drives and Negative Energy: Physicists Give Chances of Faster-Than-Light Space Travel a Boost - SciTechDaily - May 18th, 2021
- LSU student from Zachary provide work that will make NASA mission to moon in 2022 - The Advocate - May 18th, 2021
- Connecting the Dots of History: Recognizing an Oklahoman's contribution to the U.S. space program - Oklahoman.com - May 18th, 2021
- The $10 billion Space telescope that will help us travel back in time - Euronews - May 18th, 2021
- Helen Sharman: Thirty years since first Briton went to space - BBC News - May 18th, 2021
- A Florida Kayak Excursion That's Like Paddling through the Milky Way - Red Tr... - Red Tricycle - May 18th, 2021
- SpaceX Files Paperwork for First Spaceship Orbital Flight: Texas to Hawaii - Weatherboy - May 18th, 2021
- Malachy Clerkin: Sport is all about fun - like hitting a golf ball on the moon - The Irish Times - May 18th, 2021
- If Earth falls, will interstellar space travel be our salvation? - Yahoo News - May 16th, 2021
- Not just Earth, humans are polluting space too. Heres how we can stop - ThePrint - May 16th, 2021
- OPINION: SpaceX is making history The Appalachian - The Appalachian Online - May 16th, 2021
- Air and Space Museum in Spotlight as X-wing Exhibition Announced - The Great Courses Daily News - May 16th, 2021
- US Intel Chief: Chinese Space Station is a Threat to National Security - Futurism - May 16th, 2021
- Warp drives: Physicists give chances of faster-than-light space travel a boost - EarthSky - May 11th, 2021
- First American In Space: The Flight of Alan B. Shepard - National Air and Space Museum - May 11th, 2021
- The second Israeli in space: "I'm aware of the risks, but not afraid of the dangers" - Geektime - May 11th, 2021
- Star Wars X-Wing Starfighter Lands at the National Air and Space Museum - Smithsonian Magazine - May 11th, 2021
- Want to become a space tourist? You finally can if you have $250,000 and a will to sign your life away - The Conversation AU - May 11th, 2021
- Space tourism is here 20 years after the first stellar tourist, Jeff Bezos' Blue Origin plans to send civilians to space - The Conversation US - May 9th, 2021
- Southwestern to explore the health effects of space travel at the next Physics and Astronomy Lecture - Coos Bay World - May 9th, 2021
- Israeli Mission to Test Tech for Next Generation of Space Travel - Bloomberg - May 9th, 2021
- A bottle of wine aged in space could sell for $1 million how and why it tastes different than Earth-bound wine - CNBC - May 9th, 2021
- Bringing sci-fi concepts to real space exploration | Stanford News - Stanford University News - May 9th, 2021
- #SpaceWatchGL Opinion: Five reasons why astronomy is important to our future in space. - SpaceWatch.Global - May 9th, 2021
- Veteran NASA Astronaut Jeff Williams talks about the future of space travel, Mars, and a Woman on the Moon - CW39 - May 9th, 2021
- Smithsonian Will Display Star Wars X-Wing Fighter - The New York Times - May 9th, 2021
- NASAs Defunct Space Runway Will Be Used By a New Spaceplane in 2022 - Observer - May 9th, 2021
- 60 years ago, Alan Shepard became the first American in space | US Embassy & Consulates in Italy - US Embassy Rome - May 9th, 2021
- 44 Israeli Research Projects Headed For Space On Rakia Mission - NoCamels - Israeli Innovation News - May 9th, 2021
- Elon Musk is right about the inevitable risks and rewards of space travel - The Independent - May 9th, 2021
- Breaking News - discovery+ Documents Backyard Engineers Pursuing Their Dreams of Space Flight in All-New Limited Series "Homemade... - May 1st, 2021
- The Food Tech Show: The Future of Space Food - The Spoon - May 1st, 2021
- Light This Candle: What You Need to Know About Alan Shepard's Historic Spaceflight - National Air and Space Museum - May 1st, 2021
- Virgin Galactic Reschedules First Quarter 2021 Financial Results and Conference Call In Response to Recent SEC Guidance Relating to Warrants Issued by... - May 1st, 2021
- Mars helicopter Ingenuity snaps epic photo of rover tracks, will attempt 3rd flight Sunday - Space.com - May 1st, 2021
- Stanford alumna Kate Rubins returns to Earth after six months of being in space - The Stanford Daily - May 1st, 2021
- Space Tourism 20 Years in the Making Is Finally Ready for Launch - Nextgov - April 29th, 2021
- Warp drives: Physicists give chances of faster-than-light space travel a boost - The Conversation US - April 29th, 2021
- New warp drive research dashes faster than light travel dreams, but reveals stranger possibilities - Space.com - April 29th, 2021
- NASA's Mars helicopter Ingenuity will attempt its boldest flight yet today - Space.com - April 29th, 2021
- Space tourism is now a reality if youre filthy rich - The Next Web - April 29th, 2021
- Its theoretically possible to travel faster than light using the warp drives seen in Star Trek - Scroll.in - April 29th, 2021
- The explanation behind warp speed Popular Science - Popular Science - April 29th, 2021
- Meet the startup reaching for the moon to make oxygen - ISRAEL21c - April 29th, 2021
- Experts Study People Working in Antarctica As a Proxy for Astronauts - Business Insider - April 29th, 2021
- Successful carbon dioxide into oxygen conversion 'is the key' to space travel - Sky News Australia - April 29th, 2021
- Hypersonix joins the space race with hydrogen fuel - H2 View - April 21st, 2021
- So a helicopter flew on Mars for the first time. A space physicist explains why that's such a big deal - The Mandarin - April 21st, 2021
- Space Travel Reality Show Partnered With NASA, Featured On Colbert - Forbes - April 19th, 2021
- NASA chooses SpaceX to land next astronauts on the Moon Spaceflight Now - Spaceflight Now - April 19th, 2021
- Intriguing Warp Drive Research Dashes Faster Than Light Travel Dreams But Reveals Stranger Possibilities - SciTechDaily - April 19th, 2021
- Everett's own spaceman thrilled to join all-civilian mission | HeraldNet.com - The Daily Herald - April 19th, 2021
- Sitting in a tin can: why sci-fi films are finally telling astronaut life like it is - The Guardian - April 19th, 2021
- New warp drive research dashes faster than light travel dreams but reveals stranger possibilities - The Conversation AU - April 19th, 2021
- New Warp Drive Research Dashes Faster-Than-Light Travel Dreamsbut Reveals Stranger Possibilities - Singularity Hub - April 19th, 2021
- NASA Astronaut Kate Rubins and Crewmates Return From ISS After 185 Days in Space - autoevolution - April 19th, 2021
- I Watched the First Space Shuttle Flight 40 Years Ago | Flagpole - Flagpole Magazine - April 19th, 2021
- The new trailer for Fast 9 teases space travel, a cameo from Paul Walker, and more! - News24 - April 19th, 2021
- Is SpaceX Really Worth $74 Billion? Forbes - Forbes - April 19th, 2021
- Travel deep into the forest with the "Queen of the Forest Canopy" and out into space with the first woman of color in space - fox13now.com - April 19th, 2021
- Comments on: A new step in the space race: China travels to the stars - Commentary Box Sports - April 19th, 2021
- Erik Lindbergh: Right Now is the 'Most Exciting Time' in Aviation - ERAU News - April 19th, 2021
- It looks like the busiest season ever for campsites but there should be space for everyone - Telegraph.co.uk - April 19th, 2021
- Virgin Galactics Mirror-Like Spaceship Brings Us One Step Closer to Space Travel - Robb Report - March 31st, 2021
- An Astronaut's Heart Shrank From Space Travel, Study Finds - The New York Times - March 31st, 2021