Aerospace and space travel enterprise Virgin Galactic (NYSE:SPCE) generated positive headlines during a soft Monday opener on Wall Street. After suffering heavy losses since peaking in 2021, SPCE stock responded positively to management’s announcement that it aims to launch its first commercial flight in late June, per Reuters.
For beleaguered stakeholders of SPCE stock, the reveal couldn’t have come soon enough. Last year in May, Virgin Galactic — which billionaire Richard Branson backs — delayed its commercial service to the first quarter of 2023. The global supply-chain crisis along with a labor shortage represented the key negative catalysts.
Following completion of a lengthy upgrade for its centerpiece tourist spacecraft in February, states Reuters, Virgin Galactic reopened ticket sales for space flights. However, the price now stands at $450,000 per person with an initial deposit of $150,000. Previously, Business Insider mentioned that tickets sold for $250,000 per person. Further, a 2020 campaign promoted the flight with a $1,000 refundable deposit offer.
SPCE Stock Gains on Reignited Interest
Ahead of the commercial launch, Virgin Galactic announced the crew that will take part in a test flight called the Unity 25 mission. This initiative represents the final assessment of the full spaceflight system and astronaut experience, according to the accompanying press release. Fundamentally, the disclosure demonstrates that the company is committed to getting back on track, theoretically boding well for SPCE stock.
“Returning to space is what we have all worked towards,” said Mike Moses, Virgin Galactic’s president of spaceline missions and safety.
Although the reignited interest contributed to a significant pop in SPCE stock — sparking roughly an 11% move higher in the early afternoon hours — the underlying investment remains risky. In the trailing one-year period, SPCE has lost about 34% of equity value.
From its initial offering price of $10, SPCE stock has dropped 60%. While SPCE generated plenty of buzz early on, it also became a cautionary tale for special purpose acquisition company (SPAC)-based initial public offerings (IPOs).
Why It Matters
According to TipRanks, analysts peg SPCE stock as a consensus moderate sell. Individually, this rating breaks down as three holds, four sells and — significantly — zero buys. On average, the experts forecast a price target of $3.42, implying nearly 15% downside risk.
On the date of publication, Josh Enomoto 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.
