During the company’s run-up to its first commercial space flight, Virgin Galactic (NYSE:SPCE) investors received a galvanizing piece of news. It could be a game changer for SPCE stock as it involves not just one, but two new corporate-level hires.
Not only that, but one of the individuals brought on board at Virgin Galactic comes from a very well-known company. The company was already associated with one highly respected person, founder Sir Richard Branson.
But what’s the big deal? Well, Branson’s vision of private human space flight just took a not-so-small step closer to becoming a reality. And one analyst’s bullish call on SPCE stock hits the nail right on the head. Virgin Galactic’s transition is the most exciting recent development in the space tourism industry.
A Closer Look at SPCE Stock
Virgin Galactic’s exciting recent developments seem to have had a positive effect on the share price. Indeed, by the end of the trading day on July 17, SPCE stock had flown to its highest price since mid-March.
You might have heard the old saying, “The longer the base, the higher in space.” That certainly can be applied to the price action in SPCE. From mid-April to mid-July, the price action in SPCE stock was deceptively range-bound. This might have led some folks to think that the stock would be boring for the remainder of the year.
However, the stock market has a way of tricking people. In hindsight, we now know that SPCE stock was only basing for a strong bullish move. The next objective for the bulls should be to take out the 52-week high price of $42.49.
The bulls are winning, but this is no time for them to space out. They need to keep the trading volume high and really shoot for the stars in the coming weeks.
Two New Reasons to Be Bullish
Let’s just jump right into the two new additions to Virgin Galactic. First, effective yesterday, George Whitesides is the company’s chief space officer. Also effective yesterday, Michael Colglazier is Virgin Galactic’s new CEO.
Whitesides is certainly not new to Virgin Galactic or to the space-flight industry. He first joined the company back in 2010 and was Virgin Galactic’s first CEO. Whitesides had previously served as NASA’s chief of staff. So obviously, he’s more than qualified to be Virgin Galactic’s chief space officer.
But the real headline is the installation of the new CEO. That’s because of Colglazier’s prominent role at Disney (NYSE:DIS). Specifically, he was the president and managing director at Disney Parks International.
A Timely Transition
Virgin Galactic Chairman Chamath Palihapitiya summed up the value that Colglazier will bring to the company as the new CEO:
“He has considerable commercial and managerial experience and a proven track record of successfully commercializing new and innovative products and services all over the world. He will create an amazing customer experience for our Future Astronauts as we ramp up for spaceflight operations.”
This makes perfect sense as Virgin Galactic isn’t as different from Disney as some folks might think. Much like a Disney theme park, a flight with Virgin Galactic will be, more than anything else, about the experience.
As long as the experience is exciting, fun and memorable, then Virgin Galactic’s clients will be repeat customers. And, those customers will recommend Virgin Galactic to their wealthy friends.
Vertical Research Partners analyst Darryl Genovesi seems to concur that Virgin Galactic’s transition is well-timed. He recently assigned SPCE stock a “buy” rating along with an optimistic price target of $29.
The Bottom Line
Given the exciting news, Genovesi’s price target could be just the first pit stop for SPCE stock. Virgin Galactic is embarking on a new chapter as Colglazier’s experience at Disney could translate to a much better space tourism experience for the clients.
David Moadel has provided compelling content — and crossed the occasional line — on behalf of Crush the Street, Market Realist, TalkMarkets, Finom Group, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets. As of this writing, David Moadel did not hold a position in any of the aforementioned securities.