Virgin Galactics stock will go up
Virgin Galactic Stock Forecast 2021: Galactic Gains Or A Crash?
Virgin Galactic is an American aerospace company. It was founded with the aim of bringing private individuals into space. The share went public at the end of 2019 as part of a merger / SPAC deal with Social Capital from Chamath Palihapitiya.
The original thesis for a bullish Virgin Galactic stock forecast, according to Palihapitiya, was the "software-like margins" offered by the futuristic space company.
It has now been a full year since the IPO and the investor community has had enough time to evaluate the company's progress and (hopefully) answer the question of whether Virgin Galactic stock is a buy recommendation at current levels.
2020: the review
Virgin Galactic started 2020 on a high: after reaching a major milestone, investors had a bullish Virgin Galactic stock forecast. On January 9, 2020, the space company said its second spacecraft deserves the label "weight on wheels," meaning that "all the major structural components are put together." The ship was also said to be "resting on its landing gear," said George Whitesides, CEO of Virgin, in an interview with CNBC.
While investor attentiveness and optimism continued after an encouraging announcement, the stock fell to a low of $ 9.06 in March after coronavirus fears and market-wide panic, after trading above $ 30 just weeks earlier.
Investors were right to be concerned about the future of the security at a time of global pandemic. It was difficult to make a forecast for Virgin Galactic shares for 2020 and beyond.
Eventually, the majority of the world's population has been prevented or severely discouraged from visiting other countries. In what universe would someone predict an uptrend in their Virgin Galactic stock forecast?
Morgan Stanley analysts were among the few brave enough to answer the debate about buying or selling Virgin Galactic shares in March by classifying the stock as "overweight."
Bullish factors included the company's treasure trove of around $ 500 million in cash that would be more than enough to get the company through a difficult time. Regardless of this, the novel coronavirus came at a time when the space company was already making zero sales and the focus of management was solely on long-term planning and thinking.
A strong start to 2021
Virgin Galactic shares failed to rebound above the $ 30 mark until early 2021, when the company kicked off the new year with an encouraging update. On Jan. 7, 2021, Virgin Galactic commented on a recent failed test flight for its SpaceShipTwo Unity, saying that once the necessary corrective actions are verified, the company can "provide anticipated dates when the flight facility will be available."
On February 1, the group confirmed that a new test for SpaceShipTwo Unity is scheduled for the coming weeks. A successful test flight would be crucial in answering the question of whether Virgin Galactic stock will soar in 2021. Unfortunately, the planned test flight was postponed. "We have decided to allow more time for technical reviews," and we are "working on identifying the next flight opportunity."
After that news, the stock lost more than 8 percent in value and the weakness continued for the weeks that followed as the company failed to announce a new date. Investors had reason to believe this was a bearish sign, but the stock has almost doubled since the start of the year. Meanwhile, Cathie Wood, a star investor who made a name for herself with the incredible performance of her Ark mutual funds in 2020, has not given a direct answer to whether Virgin Galactic stock is a buy recommendation. However, based on its new Ark Space Exploration ETF (ticker ARKX), it must have a bullish stance on the broader industry - and thus on Virgin Galactic as well.
Virgin Galactic Stock Forecast 2021 and Q4 Results
On February 25, Virgin Galactic announced its fourth quarter financial results. As a result, the stock initially fell 13 percent (to approximately $ 36.77), in addition to an 8 percent decline during the regular trading session. The forecast for Virgin Galactic's 2021 share price was hit on two fronts. First, ahead of the results released, the company announced that CFO Jon Campagna would be stepping down from his post. Although the executive had planned to stay until the company's transition to a public company, any major change at the C-level of a company this early will at least raise questions.
Hours later, the results for the fourth quarter were released, in which the headline numbers were not all that bad. Adjusted EBITDA loss was $ 59.5 million compared to $ 66 million for the last quarter. Revenue was zero, as expected, while cash on hand fell to $ 666 million from $ 742 million in the last quarter.
As for the experts' Virgin Galactic stock forecast for the next 12 months as of March 15, the average target price of the nine analysts surveyed by CNN Money is $ 40, an increase of 16.01 percent from its last closing price of $ 34.48. The highest analyst target is $ 50 and the lowest is $ 20.
Bottom line: is Virgin like Tesla?
The big question about whether Virgin Galactic stock is a good investment is the news about the spaceflight test. The originally planned and canceled date on February 13th was officially postponed to May. The company also said it now expects to carry passengers in early 2022.
The answer is not easy. Investors are quick to point out the many similarities between Virgin Galactic and the electric vehicle maker Tesla. In the early days of Tesla, CEO Elon Musk made many promises of interim results that he rarely delivered on time. But Musk ultimately proved the skeptics wrong by achieving his goals, albeit years behind schedule. The company initially assumed that deliveries of the Model X would begin in early 2014. However, the first vehicle was only delivered at the end of September 2015.
The same scenario could play out with Virgin Galactic. The company can continue to miss deadlines and postpone key milestones as long as it is ultimately successful. But the company is running out of time and has to start making progress very soon.
For now, at least, the non-revenue business numbers aren't as important to the stock as management's ability to convince investors that the company has decades to go.
Virgin Galactic Holdings, Inc.- Trade SPCE CFDs
We encourage you to conduct your own Virgin Galactic stock analysis before deciding whether to add the security to your portfolio. Don't forget that Contracts for Difference (CFDs) allows you to speculate on the price fluctuations of the stock regardless of its direction. Go long if you think Virgin Galactic stock will go up or go short if you think Virgin Galactic stock will go down. Follow the Virgin Galactic share price live on our interactive chart to identify the best entry opportunities. What is your Virgin Galactic forecast?
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