The long-awaited start of commercial service for space tourism pioneer
Virgin Galactic
is oh-so-close. Investors were bidding up shares in anticipation.
The company announced Monday it would be flying to the edge of space on June 29. The company calls the flight, dubbed Galactic 01, its first commercial spaceflight. The three-person crew from the Italian Air Force and National Research Council of Italy will take a 90-minute flight to conduct a series of suborbital science experiments.
A livestream of the flight will go live at 11 a.m. Eastern time.
Virgin Galactic
(ticker: SPCE) traded slightly higher Monday, while the
S&P 500
and
Nasdaq Composite
were up about 0.1% and 0.4%, respectively.
Shares have been volatile headed into the start of commercial service. Coming into Monday trading, Virgin Galactic stock has risen roughly 30% over the past month but has declined 10% over the past week.
Some volatility should be expected. It’s a big event for the embattled space tourism start-up and investors have been waiting about three years for it to happen. When the company was raising money in a merger with a special purpose acquisition company, or SPAC, in 2018 it expected to launch commercial service in the first half of 2020. A series of equipment-related and regulatory delays slowed down the process.
With service starting, investors can start thinking about potential. Wall Street projects 2023 revenue of about $11.6 million. The company has a backlog of hundreds of potential astronauts representing more than $100 million in sales. More will have to line up for the company to hit Wall Street’s sales projections. Over the coming five years, analysts project about $1.2 billion in cumulative sales. Wall Street also projects full-year profit and cash flow when sales hit about $700 million a year around the end of the decade.
Getting to break-even and beyond will be a long process. Investors aren’t as willing to wait as they once were. Virgin Galactic shares are still down more than 90% from an all-time high of $62.80 reached in February 2021.
Write to Al Root at [email protected]
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