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Will the Coronavirus Derail the Momentum of Virgin Galactic Stock in 2020?

The coronavirus pandemic will likely delay Virgin Galactic's first space flight for the foreseeable future.

The space tourism company Virgin Galactic Holdings (NYSE:SPCE) is slated to report its first-quarter earnings after the market closes on May 5. During the company’s earnings conference call,  its management will review its first-quarter earnings and discuss its expectations for the remainder of the year.

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SPCE stock has been on a bit of a bumpy ride over the past few months. After hitting a 52-week high in mid-February, the stock has bounced up and down ever since. It’s interesting to see that the stock tends to rise as the market dips and then dip as the market rises.

Virgin Galactic is very different from other publicly traded companies. It is developing a commercial spaceflight system, but that takes a lot of time, and the company still has very low sales and very few customers.

Nonetheless, many investors are enthusiastic about SPCE stock, and it’s analysts are  moderately upbeat about it. But the ongoing coronavirus pandemic has caused problems for many companies, including Virgin Galactic Holdings.

Will SPCE Stock’s First Space Flight Delayed by COVID-19?

Many people were expecting that this would be the year that Virgin Galactic finally launches its first commercial space flight. As of February, more than 600 people had reserved a seat on the company’s SpaceShipTwo aircraft.

The company announced it would begin selecting candidates for space flights soon.  The flights are expected to cost a pricey $250,000 per person.

Launching its first commercial space flight would have been a huge step forward for Virgin Galactic, but these plans will likely be on hold for the foreseeable future. The travel industry as a whole is struggling, and it’s unclear when we’ll even be able to travel by airplane again, much less go into space.

But it’s not just climbing aboard Virgin Galactic’s  six-passenger aircraft that’s the problem. Before passengers can take a commercial space flight, they need to receive training, get fitted for a flight suit, and receive a thorough medical evaluation.

All of that involves travel and a lot of in-person contact, which is not possible when so many states are implementing mandatory stay-at-home orders.

There Are Positive Tailwinds for SPCE Stock Going Forward

The commercial space flight probably won’t happen in 2020, but that doesn’t mean all hope is lost for SPCE stock investors.

In spite of the coronavirus setback, Virgin Galactic does have potential going forward. Commercial space travel likely will become a reality within the next couple of years, and SPCE stock has the advantage of being the first publicly traded space tourism company.

The company still has healthy cash flow and is well-positioned to overcome these temporary setbacks. That makes Virgin Galactic Holdings a good long-term investment

Jamie Johnson is a personal finance freelance writer and has been writing for InvestorPlace since mid-2019. She writes for a number of other well-known financial sites, including Credit Karma, Quicken Loans and Bankrate. As of this writing, Jamie Johnson did not hold a position in any of the aforementioned securities.


Article printed from InvestorPlace Media, https://investorplace.com/2020/04/spce-stocks-momentum-2020/.

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