Virgin Galactic Falls For First Time In Two Weeks
Virgin Galactic (SPCE) stock ended slightly lower Thursday after the space tourism company's CEO spoke at a conference while a top analyst said a correction is overdue after an epic run-up.
CEO George Whitesides spoke at an invitation-only event Thursday morning at the Barclays Industrial Select Conference in Miami, but his remarks haven't been made public yet.
Analysts had speculated that Whitesides would announce more details on the timeline of its space tourism plans at the private event.
Earlier Thursday, Morgan Stanley analysts published a note that said the "enthusiasm around the emerging space economy has triggered a pace of volume and volatility" that took the analysts "by surprise." But a correction is overdue for Virgin Galactic stock, they wrote in a note titled "Even Spaceships Must Return to Earth."
"A modest correction is overdue, and frankly, healthy, in our opinion," analyst Adam Jonas said, noting that little has changed since he started coverage on Virgin Galactic stock in December with an overweight rating and a 22 price target.
"We do struggle to identify significant thesis changing/accelerating events since the time of our initiation in early December of 2019," he explained. "Narrowing the knowledge gap of understanding is clearly a material positive, but we do still believe the stock deserves a bit of a breather here."
Jonas added that Virgin Galactic could offer new shares, which typically sparks a sell-off. "While the company has sufficient levels of liquidity to meet the needs of launching its commercial service, investors may nonetheless ask, or even encourage, management to consider adding to the coffers."
Next Big Event For Virgin Galactic Stock: Earnings
Shares closed down 0.2% at 37.26 on the stock market Thursday, marking its first decline in two weeks, after initially surging as much as 13.8% then selling off as much as 18%. Virgin Galactic stock is up more than 200% so far this year.
On Oct. 28, Virgin Galactic became the first publicly traded commercial space tourism company after a reverse merger with Social Capital Hedosophia Holdings.
Boeing's (BA) venture capital arm HorizonX took a $20 million minority stake in Virgin to help Richard Branson's company develop a vehicle to travel Earth at hypersonic speeds.
Virgin Galactic will report fourth-quarter earnings after the market closes on Feb. 25, marking its second report since going public.
Jonas expects the analyst call to focus on upcoming testing and certifications for its Spaceship, VSS Unity. That includes future potential strategic partnerships, potential government development contracts and the first commercial flight, with Branson a passenger.
In its Q3 report in November, Virgin Galactic said that, as of Sept. 30, it had received reservations from over 600 people in 60 countries, amounting to $80 million in deposits and $120 million in potential revenue. Virgin also had 3,557 expressions of interest in flight reservations by the end of Q3.
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