Shares of Virgin Galactic Holdings Inc. shot more than 20% higher on Monday after the company got a step closer to its goal of offering space-tourism flights in what Wall Street called a “major milestone” moment.
on Saturday successfully completed its first rocket-powered flight from New Mexico to the fringe of space in a manned shuttle, putting the company closer to its goal of offering space-tourism flights.
“We view this event as a major milestone that puts the company’s upcoming test
flight schedule back on track, enables the company to commence revenue generating commercial flights in early 2022 and importantly validates our long term thesis on the company,” analyst Michael Ciarmoli at Truist Securities said in a note Monday.
The stock was on track for its highest close since April 14, and its largest one-day percent increase since Feb. 1. Monday’s rally also extends Virgin Galactic’s winning streak to a seventh session, for gains of nearly 65% in the period.
Saturday’s flight follows a December test flight that was aborted after technical problems. Virgin plans another test flight with two pilots and four employees
to test passenger cabin and flight procedures and other space flights before its spacecraft undergoes maintenance for several months. It the company’s timeline holds, it will transition to commercial operations by early 2022.
Virgin Galactic has been riding a wave of renewed optimism about the company after the aborted flight and reporting worse-than-expected quarterly results May 10.
On Friday, analysts at UBS upgraded their rating on Virgin’s stock to buy, saying the recent stock retrenchment on flight delays, “we see upside from here.”
“We remain positive on the fundamentals of the VG offering as well as the scarcity of the experience provided to customers,” they said.
Virgin reported a wider first-quarter loss, saying the pandemic was still crimping its business.
The stock has gained 60% in the past 12 months and 6% year-to-date, which compares with 12-month gains of 42% and a year-to-date advance of 12% for the S&P 500 index.