Down 13% Last Week, What’s Next For Virgin Galactic Stock

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Virgin Galactic stock declined by about 13% over the last week (five trading days) and remains down by almost 18% over the last month (21 trading days). This compares to the S&P 500 which was up by almost 2% over the past week. The declines come as the company pushed back the planned start of its full commercial service to Q4 2022, marking a significant delay from the early 2022 timeline investors were expecting. The company says that it needs to make certain enhancements to its spaceplanes in order to make them safer and more robust for the long run. This will delay some key test flights that are required before commercial operations. With this news, Virgin has erased all the gains it saw since its founder Richard Branson flew to space in early July, with the stock now down by over 13% year-to-date.

Now, is Virgin Galactic stock poised to grow? Based on our machine learning analysis of trends in the stock price over the last four years, there is a roughly an equal chance of a rise or a decline in SPCE stock over the next month (twenty-one trading days). See our analysis on Virgin Galactic Stock Chance of Rise for more details.

Five Days: SPCE -13%, vs. S&P 500 1.8%; Underperformed market

(8% Event Probability)

  • Virgin Galactic stock declined -13% over a five-day trading period ending 10/15/2021, compared to the broader market (S&P500) which rose almost 2%.
  • A change of -13% or more over five trading days has an 8% event probability, which has occurred 78 times out of 1013 times in the last four years.

Ten Days: SPCE -16%, vs. S&P 500 2.7%; Underperformed market

(9% Event Probability)

  • Virgin Galactic stock declined -16 % over a ten-day trading period ending 10/15/2021, compared to the broader market (S&P500) which rose 2.7%
  • A change of -16% or more over ten trading days has a 9% event probability, which has occurred 95 times out of 1008 times in the last four years.

Twenty-One Days: SPCE -18%, vs. S&P 500 -0.3%; Underperformed market

(12% Event Probability)

  • Virgin Galactic the stock declined 18% over a twenty-one day trading period ending 10/15/2021, compared to the broader market (S&P500) which declined by -0.3%
  • A change of -18% or more over twenty-one trading days has a 12% event probability, which has occurred 121 times out of 997 times in the last four years.

[8/24/2021] Down 50% Since Branson’s Space Flight, Is Virgin Galactic Stock A Buy?

Virgin Galactic (NYSE: SPCE) stock has dropped by almost 50% since the company successfully flew its first fully crewed test flight into suborbital space, carrying its founder, Richard Branson, on July 11. There are a couple of factors driving the decline including the company’s move to sell about $500 million in the stock a day after the test flight, and rival Blue Origin’s successful crewed rocket ship launch in mid-July. Moreover, investors are likely looking beyond Virgin’s test flights to its commercial flying timeline, which is likely at least one year away. So does the recent sell-off present a buying opportunity for Virgin Galactic stock? We think it does for a couple of reasons.

Last month’s successful test flight marked a big milestone for Virgin Galactic, validating its spaceplane technology and bringing it much-needed publicity. There’s also a lot less risk for investors, who can now be more confident that Virgin Galactic is no longer a “concept stock” and will almost certainly start commercial flights carrying revenue-generating passengers. Demand for the company’s space flights also appears to be strong. Earlier this month, the company resumed ticket sales at a price of $450,000, which marks an increase from the $200,000 to $250,000 levels the company was selling tickets at back in 2014 before it closed sales for almost seven years. This likely indicates that the company is confident about its pricing power and this could bode well for profitability.

Now Virgin Galactic stock is somewhat difficult to value objectively. The company doesn’t generate revenues just yet and the economics of its business also remain uncertain at this juncture. However, the risk to reward prospects for the stock has clearly improved in recent weeks. The stock currently trades at just about $25 per share, roughly the same levels it was trading around back in January 2021, a time when it wasn’t selling tickets and space planes remained relatively unproven.

Moreover, the private space industry is still in its early stages and is likely to see a lot more buzz in the coming years. While Elon Musk’s SpaceX and Jeff Bezos’ Blue Origin have taken big strides with their developments, Virgin Galactic remains the only publicly listed space tourism player. This could bring the stock more attention from investors looking to play the space theme.

The Trefis Machine learning engine estimates that Virgin Galactic stock has a 62% chance of rise over the next month. See our analysis on Virgin Galactic Stock Chances Of A Rise for more details.

[7/6/2021] Buy Virgin Galactic Stock Ahead Of Richard Branson’s Space Flight?

July promises to be an eventful month for the suborbital space tourism industry. Virgin Galactic (NYSE: SPCE), is set to fly its founder Richard Branson to space, as a member of the crew on the next test flight of the Virgin Galactic spaceplane. The trip will come less than two weeks before space startup Blue Origin flies its founder and e-commerce titan Jeff Bezos as part of its first crewed flight on the New Shepard rocket ship. These two high-profile trips are likely to create a lot of buzz for the space tourism industry in general, and Virgin Galactic being the only publicly listed space tourism player, could receive a lot of attention. Moreover, Virgin Galactic is also quite likely to resume taking bookings for its space flights following Mr. Branson’s trip, after having suspended ticket sales back in 2014.

That said, we think all the good news is more than priced-in for Virgin Galactic’s stock, which has rallied by almost 45% over the last month (21 trading days) to levels of around $44 per share. Consensus revenue estimates for 2022 stand at just about $50 million, meaning that the stock trades at over 180x forward revenues. Although the success of a crucial test flight held in May (see update below) and the commercial launch license approval by the U.S. Federal Aviation Administration in late June remove much of the uncertainty surrounding Virgin Galactic’s transition from an experimental player to a commercial business, the longer-term growth outlook and the economics of a space business aren’t exactly clear for investors. Share sales by Virgin’s top investors earlier this year, at much lower stock prices, also don’t really inspire confidence. For example, Chamath Palihapitiya, the company’s chairman, divested his entire personal stake in the company at levels of about $34 per share while Mr. Branson sold over 5 million shares at levels of under $30. Separately, investors are likely to continue rotating out of futuristic stocks as the U.S. Federal Reserve turns increasingly hawkish, projecting two rate hikes in 2023. This could also hurt Virgin stock in the coming quarters.

Trefis’ Machine learning engine estimates that Virgin Galactic stock has a 65% chance of decline over the next month, after rising by about 45% over the last 21 days. See our analysis on Virgin Galactic Stock Chances Of A Rise for more details.

[6/28/2021] Virgin Galactic Stock Too High, Too Fast?

Virgin Galactic stock rallied by over 38% on Friday, with the stock now up by almost 107% over the last 21 trading days. The rally comes as the U.S. Federal Aviation Administration gave the company a full commercial launch license following its successful May test flight (See below). This effectively means that Virgin Galactic will be able to carry customers into space when it is ready to do so. The company has three other planned test flights, the next of which is likely due in early July and as things stand, commercial operations are likely to begin early next year.

While the news is certainly encouraging, with Virgin becoming…

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