Virgin Galactic Stock: A Dream Project, But A Wise Investment?
Virgin Galactic stock is seen by many investors as the next big thing. However, is it a good investment? This dream project may well be the next Tesla in the stock market. Can Sir Richard Branson replicate Elon Musk’s ability to make a visionary project profitable?
Virgin Galactic (NYSE: SPCE) is the spaceflight company within Virgin Group. Its mission is to “open space for everyone” with the world’s first commercial spaceline. That’s no easy task, but Branson has the resources to push further than anyone before him.
However, where is SPCE stock currently? And what can we expect in the future?
Virgin Galactic Stock Overview
Virgin Galactic’s IPO came on October 28, 2019. Richard Branson rang the opening bell at the New York Stock Exchange that day.
This marked the first commercial spaceflight company to list on the stock market. It was a giant leap forward, but how did the stock fare in the early going?
For starters, it received a valuation of around $2.3 billion on its debut. Shares opened at $12.34 and rose as high as $12.93. Yet, they closed the day at $11.75.
Since its IPO, Virgin Galactic stock has steadily gained traction. It reached as high as $42.49 a share in February. However, the coronavirus outbreak is running its course and no stock has been safe.
Since the beginning of the outbreak, SPCE stock has dropped to $16.41. That’s a decrease of 61%. Before the outbreak, the stock posted three consecutive weeks of gains.
This is an unfortunate trend in the market right now. Other speculative stocks, such as Tesla and Plug Power, aren’t fairing too well either.
Is Now the Time to Buy SPCE Stock?
If you are willing to weather the coronavirus storm, it may be the perfect time to invest in Virgin Galactic. The potential is there and the company itself is closer than ever to space tourism.
The company was founded in 2004 and began with small strides forward into commercial spacecraft. Now, the company is making one giant leap after another.
Their spacecraft has been to space on several occasions since 2018. This is huge considering the endless amount of delays in the early 2000’s.
In February of 2019, Virgin’s VSS Unity spaceplane was sent into space for the second time. This venture, however, included its first test passenger. According to Virgin, 600 people have already reserved their seat to be one of the first commercial passengers in the future.
Despite reaching new heights, Virgin Galactic stock has been volatile. The company also struggled to meet financial expectations throughout 2019.
Revenue was down 36% in the fourth quarter to $529,000. It also reported an adjusted EBITDA loss of $55 million. This is the earnings before interest, tax, depreciation and amortization.
Total 2019 revenues came to $3.78 million. This is well below the mark and it’s not sitting well with investors. Chief executive George Whitesides was quick to address the 2019 fiscal year and what to expect in 2020.
“Ultimately, the amount of revenue that we generate in 2020 is really not the thing that’s going to make this company a great success,” Whitesides stated. “What’s going to make it a great success is having a vehicle that we can turn around relatively rapidly and do that on a consistent basis. And then build a fleet of them so we can add more capacity into the market.”
The plan is to begin commercial flights this year, though delays can be expected. Richard Branson himself will be on the first commercial flight to space.
Investing in Virgin Galactic Stock
Do you have an interest in innovative tech stocks? If so, you are more than likely considering SPCE stock. Perhaps you’re also waiting for SpaceX to IPO?
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About Corey Mann
Corey Mann is the Content Manager of Investment U. He has more than 10 years of experience as a journalist and content creator. Since 2012, Corey’s work has been featured in major publications such as The Virginian-Pilot, The Washington Post, CNN, MSNBC and more. When Corey isn’t focusing on Investment U, he enjoys traveling with his wife, going to Yankees games and spending time with his family.