Virgin Galactic stock price could jump by 65% after the spaceflight

on May 24, 2021
Updated: Jun 1, 2022
  • The Virgin Galactic stock price has surged by more than 26% in the premarket.
  • The company completed its first spaceflight in more than three years.
  • This means that the company is nearing its product development phase.

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The Virgin Galactic (NYSE: SPCE) stock price is flying in the premarket as investors cheer the successful spaceflight in more than two years. The stock is set to open at $26, bringing its total gains since May 11 to more than 80%. The shares will still be 58% below its year-to-date high of $62.50.

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SPCE stock price
SPCE stock price chart

Virgin Galactic spaceflight

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The Virgin Galactic stock price has been under intense pressure this year as investors questioned the pace of its development. There have also been concerns about the rising competition from companies like Blue Origin and Elon Musk’s SpaceX. 

Most importantly, the stock has dropped as part of the overall sell-off of companies that went public through special purpose acquisition companies (SPAC). Its short interest has also been relatively high. According to MarketBeat, the company has a short interest of more than $757 million.

The SPCE stock price is jumping on Monday after the company completed its first spaceflight in more than 2 years. VSS Unity, the company’s spacecraft was carried by VMS Eve up to 44,000 feet. It was then released and traveled more than 3 times the speed of sound. It then returned back to the atmosphere and landed at Spaceport America in New Mexico.

Therefore, the stock is rising because the successful launch and return mean that the company is nearing the final stages of its development. Once complete, the craft will carry up to 6 people to space. It has already sold 600 reservations at between $200,000 and $250,000 each.

Is the SPCE stock a buy?

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Analysts are generally optimistic about the SPCE stock price. In a report last week, analysts at UBS said that the company had a 80% upside and placed a target to $36. The analysts believed that the shares were relatively cheaper than in the past. They also pointed to the overall fundamentals of the company. 

Other analysts bullish on Virgin Galactic stock are from Credit Suisse, Susquehanna, Bernstein, and Bank of America. In general, analysts are excited because of the overall total addressable market for the space industry. The industry has high barriers to entry and the leading firms like SPCE, Blue Origin, and SpaceX is expected to dominate. 

A recent report said that the space tourism industry will reach more than $2.2 billion in 2026. However, the industry has also a high risk since a single accident would lead to significant losses. 

Virgin Galactic stock price analysis

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Virgin Galactic stock price
Virgin Galactic stock price chart

The daily chart shows that the SPCE stock has been under pressure in the past few months. In the past few days, though, the stock has surged. It has managed to move below the 78.6% Fibonacci retracement level. It will also move above the 25-day and 50-day weighted moving averages, which is a bullish sign. Therefore, there is a possibility that the stock will keep rising as bulls target the 50% retracement at $34.75.


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