The idea of space tourism is out of this world.
As is demand…
In fact, while companies aren’t ready to send consumers into space just yet, companies are already seeing big demand. According to analysts at Cowen, 39% of people with a net worth of more than $5 million are already interested in paying at least $250,000 for a flight, says CNBC.
One of the top stocks seeing sizable momentum on the story is Virgin Galactic (SPCE), which is seeing big interest from analysts.
Credit Suisse, for example just reiterated an outperform rating on the stock, telling investors not to be on the sidelines, as SPCE enters the next round of development testing.
“With flight schedule visibility improving, and with scarce public investment opportunities in Space, we see a healthy demand environment for shares during the catalyst period,” Credit Suisse analyst Robert Spingarn said, as quoted by CNBC.
UBS initiated coverage with a buy rating and said the SPCE stock could rocket 50% over the next year, as space tourism becomes a potential $800 billion industry by 2030, says Forbes. UBS also sees demand outstripping supply for many years when SPCE starts its commercial operations.
Although “there will be competitors,” Virgin Galactic has an advantage in its “life-long brand connection, in addition to an operating model supporting a uniquely high flight-rate,” UBS analyst Myles Walton said in his note.
And while earnings are nothing to write home about just yet, there’s still opportunity – as it expects to see its first commercial space flight taking place in the first quarter of 2021.
In its most recent quarter, SPCE posted a Q2 loss of 30 cents on zero revenue. Analysts were expecting a loss of 28 cents a share. In addition, the company has already received 700 deposit payments for potential passengers as part of its “One Small Step” initiative.
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