Virgin Galactic’s surging stock to fall back to Earth
'A modest correction is overdue'
Virgin Galactic shares have launched into the stratosphere, but their space-flight is nearing an end, according to one Wall Street analyst.
Shares of the space-tourism venture have soared 222 percent this year through Thursday, outperforming even market darling Tesla.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| SPCE | VIRGIN GALACTIC HOLDINGS INC. | 6.72 | +0.04 | +0.60% |
“A modest correction is overdue, and frankly healthy, in our opinion,” Morgan Stanley analyst Adam Jonas wrote Thursday. Shares finished the day at $37.26 apiece, about 70 percent above his team’s $22 price target.
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“In our opinion, the stock is fully discounting a highly successful space tourism business at scale, a moderately successful space tourism business with early credit for the hypersonic opportunity, or a combination of both,” he added.
The first publicly traded space-tourism company, Virgin Galactic has invested more than $1 billion in the fledgling business over 16 years. Virgin completed two manned test flights in late 2018 and early 2019, and its December flight was the first into space from U.S. soil since NASA retired the space shuttle.
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Virgin Galactic reported a net loss of $51.5 million in the third quarter on revenue of $832,000. The company is scheduled to report its fourth-quarter results on Feb. 25 with Wall Street analysts surveyed by Refinitiv expecting an adjusted loss of 19 cents a share on revenue of $2 million.