Virgin Galactic (NYSE:SPCE) stock is rebounding this morning after reporting mixed fourth-quarter results.
So what do you need to know? SPCE stock is up more than 10% as of this writing after closing yesterday at $7.82 per share. The move higher follows its Q4 results, where Virgin Galactic reported a loss of 31 cents a share on revenue of $141,000. Analysts expected a loss of 35 cents per share on $300,000 of revenue. The narrower-than-expected loss appears to be enough to move Virgin Galactic’s stock higher, which is good news given that it has fallen 80% over the past year.
However, there are several other catalysts that could be contributing to the current rebound in SPCE stock. Here are three key reasons Virgin Galactic share might finally be ready for take off.
3 Major Catalysts for SPCE Stock
- The biggest and most obvious catalyst for SPCE stock is news that Virgin Galactic reopened ticket sales to the general public on Feb. 16. Customers can make reservations on a future space flight with a $150,000 deposit. Why does this matter? Preorders had been closed since October following a regulatory investigation. News of the ticket sales return was enough to send Virgin Galactic up 32%.
- Another big recent event was news that Chairman Chamath Palihapitiya is stepping down from the company’s board of directors, effective immediately, and will have no further involvement with Virgin Galactic. While a board chairman resigning is usually negative news for a company, Palihapitiya had been a controversial figure. He received criticism for selling his personal SPCE stock stake not long after the SPAC merger closed.
- The final catalyst is news of Virgin Galactic’s cash position. The company said in its latest earnings release that it currently has $931 million in cash on hand to fund its ongoing operations. That news likely came as a relief to investors and analysts who have expressed concerns about its ability to fund itself in the lead-up to commercial launch. Virgin Galactic’s Q4 revenue of $141,000 was also positive given that the company earned no revenue in the year-earlier period.
What’s Next for Virgin Galactic
SPCE stock is not out of the woods yet.
Virgin Galactic’s operations remain in a precarious position as the company races to begin flying wealthy tourists into space and generate meaningful revenue. And while today’s bounce higher is encouraging, it is not nearly enough to erase the heavy damage shares have suffered over the past year. This is a badly beaten-down stock that was trading above $55 per share last June. Despite today’s move higher, investors should be careful with Virgin Galactic’s stock.
On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
