Virgin Galactic Stock Takes Flight—Analysts Expect Future Sales of $1 Trillion Per Year

December 11, 2019 12:02 pm Published by
Virgin Galactic Holdings Inc. stock has started to recover its losses since its IPO on October 28, 2019. This rise is attributed to a Morgan Stanley analyst predicting a meteoric rise of 726% in the coming years.

The company’s stock dipped to as low as $7.22 per share in the month of November, which is down significantly from its IPO price of roughly $11.50. Following the Morgan Stanley report, the company’s stock shot up an impressive 15% during Monday’s trading hours.

So far on this Tuesday morning, the stock continues its hot streak, gaining a further 11% at the time of this writing. Despite these impressive numbers, the stock has yet to reach its IPO price, currently, shares are trading around the $9.30 mark.

The aforementioned investment bank has set a near term price target of $22 a share.

The predicted growth of Virgin Galactic comes not from the firm’s planned space travel endeavors, but instead from their hypersonic airline travel plans that the company has been working on in partnership with The Boeing Co., following a $20 million investment from the Chicago based aerospace company.

Morgan Stanley analyst Adam Jonas who wrote a note to investors predicts that Virgin Galactic could bring in nearly a trillion dollars a year in sales, thanks to the estimated 2.7 million customers who would be willing to drop in excess of $100,000 on an around the world flight that takes a fraction of the time that passengers have become accustomed to.

Though the future does look bright for Virgin Galactic, spending will continue to increase in the near term. In the first nine months of 2019, the company reported losses of $138 million, with $100 million being allocated to research and development. The losses experienced in this year’s first three quarters already dwarf the $85 million loss the company reported during the same period a year prior.

Luckily for Virgin Galactic, the firm received a $430 million cash influx recently following a reverse merger with Social Capital Hedosophia that also resulted in the firm being listed publicly on the New York Stock Exchange.