Virgin Galactic climbs 24% on Tuesday marking a 400% gain in the stock market since early December

Virgin Galactic Holdings extended its upward rally further on Tuesday with a massive 24% daily gain. Following yesterday’s rally, Virgin now records a more than 400% increase in the stock market since early December. While analysts appreciate its performance, they are now recommending caution highlighting that the spaceflight company has entered the “overbought” territory.

In recent sessions, billionaire Richard Branson backed Virgin Galactic has turned favorite for individual investors and competes head-on in terms of stock performance with another popular choice for non-professional investors, Tesla Inc. Data from Fidelity’s online brokerage branded Virgin Galactic as the 3^rd most traded stock in recent sessions. The data also highlighted around 70% of the traders holding a buy position in its stock. Virgin Galactic’s orders were reported behind Tesla and Apple Inc. only.

Virgin Galactic Is The Only Publicly Traded Space Tourism Company

Virgin Galactic is a staunch competitor of SpaceX (Tesla’s subsidiary) and Blue Origin (Amazon’s subsidiary) in the space tourism niche. Virgin, however, is the only one in this category that is publicly traded. In other words, for investors who wish to put their money in the rapidly growing space travel industry, Virgin Galactic is the only option at their disposal in the stock market as of now.

According to Adam Jonas of Morgan Stanley, Virgin Galactic is now in the “overbought” category and the recent rally in its stock was inexplicable in terms of fundamental factors. Appreciating Virgin Galactic’s performance, Stanley still kept his price target of $22 on its stock.

Virgin Galactic itself claims to have over 600 reservations for space flights at the moment. The 90-minute flights are priced at $250,000 per ticket and offer a weightlessness experience for several minutes. All in all, the company values its deposits for such flights at $80 million.

UBS Says Space Tourism Industry Will Be Worth $3 Billion By 2030

The upward rally was initially fueled last week when Virgin Atlantic’s SpaceShipTwo vessel was moved to the operational base located in New Mexico. Spaceport America is a commercial spaceport that is specifically designed to perform the final stage test flights, as per Virgin Galactic.

According to UBS, the space tourism industry will hit the $3 billion mark by 2020. All three of the prominent analysts who cover Virgin Galactic, however, currently see it as overbought with $19 per share as the median price target.

The annual gain in Virgin’s stock in 2019 was recorded at around 20%.