Why Virgin Galactic Stock Is Up By 18% Today

Virgin Galactic Video 24.05.21.

Virgin Galactic Stock Moves Higher After Successful Test Flight

Shares of Virgin Galactic opened with a big gap up today after the company’s VSS Unity had a successful space flight on Saturday.

Not surprisingly, analysts rushed to increase their price targets for the stock after the successful flight. It should be noted that the company will have to complete three test flights before it will be ready for commercial flights.

The stock started the year on a strong note as investors rushed to buy riskier assets but lost momentum in February and declined from the $60 level to the $15 level in early May.

The company has recently reported its quarterly results, missing analyst estimates on both earnings and revenue. However, traders focused on the test flight which is a more important catalyst compared to near-term financials, so the stock managed to gain significant upside momentum.

What’s Next For Virgin Galactic?

The test flight is a major milestone for Virgin Galactic, and the company’s shares have a good chance to gain additional upside momentum.

The stock is trading more than 50% below highs that were reached back in February so current levels may attract speculative traders.

The following test flights will serve as the main catalysts for the company’s stock, and the market will likely ignore financial reports.

Analysts expect that Virgin Galactic will continue to report losses in the next few years but traders will focus on the company’s future financial opportunities. I’d note that the company has a market capitalization of less than $6 billion which is not big for a potential leader in new market segment in the current environment.

In this light, there is plenty of room for upside in case upcoming test flights are successful and the company is ready to take paying customes onboard.

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