The stock is up more than 170% since early December.
Virgin Galactic Holdings, the exploratory space stock, has been on a roll over the past couple of months. The stock is currently up more than 90% since going public last October, and the company is starting to get noticed by Wall Street analysts.
According to Morgan Stanley analyst Adam Jonas, Virgin Galactic is a big topic of conversation on Wall Street. Both Morgan Stanley and Credit Suisse have initiated buy ratings on the stock.
Virgin Galactic is a $3.4 billion company focused on the luxury space tourism market. The company expects that its revenue will grow by an astonishing 580% by fiscal 2021.
But how likely is this to happen? Here are three things you should know about Virgin Galactic stock.
1. The company’s finances look solid
Virgin Galactic is in the early stages of building its business, but so far, the financials look pretty solid. The company is backed by the holding company Virgin Group Ltd, which is owned by billionaire Richard Branson. The company is debt-free and has a small amount of free cash flow.
2. Virgin Galactic is a speculative stock
Virgin Galatic is developing commercial spacecraft designed for space tourism. The company owns and operates two different aircrafts which are designed to carry five passengers to space. Customers can participate in this “space tourism” for the cost of $250,000 per person.
The company is still considered a speculative stock since it hasn’t yet started transporting anyone to space. But it does plan on beginning its space travels later this year.
3. Investor interest is growing
Virgin Galactic stock has rallied in recent months, and investor interest is slowing beginning to pick up. This process has been slow, partially since the company and the idea of space tourism is so new.
Vanguard Group invested $90 million in the company across several index funds. Charles Schwab and BlackRock also invested in Virgin Galactic shares.
Overall, the company is considered a moderate buy on Wall Street. We’ll know more about what’s in store for Virgin Galactic in 2020 when the company releases its fourth-quarter earnings report on Feb. 25.
