Shareholders of Virgin Galactic (NYSE:SPCE) are surely smiling this morning in light of SPCE stock’s near-30% gain. The space transportation company announced that it would be opening up reservations for space travel to the public, starting with a $150,000 deposit. In total, the ticket price will amount to $450,000, with $25,000 being non-refundable. A high short interest could factor into SPCE stock’s outsized gains today as well. The company carries a short interest as a percentage of float of 23.87%.
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Virgin Galactic will offer three selections for its space travel venture: single seats, packaged seats for friends and family, and entire private flights. Interested parties can submit an application on Virgin Galactic’s website. In addition, the company plans on having at least 1,000 reservations when commercial service commences, which should generate revenue of $450 million. In contrast, Wall Street expects the company to generate $8 million of sales this year.
Over the past decade, Virgin Galactic has fielded roughly 700 reservations for tickets. A majority of these tickets sold for prices between $200,000 and $250,000. Last August, the company reopened reservations privately, starting at $450,000 per ticket. As of November, Virgin Galactic had received reservations for 100 of these tickets.
With shares of SPCE stock still down more than 25% year to date, investors are upbeat about the optimistic news. Let’s pivot over and see how Wall Street feels about the space travel company.
3 Analysts Weigh In on SPCE Stock
- Canaccord Genuity has a price target of $36. Analyst Austin Moeller lowered his price target from $44 after Virgin Galactic announced plans to offer $425 million in convertible notes. In addition, the analyst notes that Q4 free cash flow was better than expected, coming in at $67.5 million. Moeller is looking forward to the company being able to embrace more expensive reservations.
- Jefferies has a price target of $30. Analyst Greg Konrad noted that demand should not be constrained by supply as more people reserve tickets. Furthermore, the analyst believes Virgin’s “long-term potential is an attractive value proposition given a growing commercial space tourism market.”
- Morgan Stanley has a price target of $17. Analyst Kristine Liwag states that Virgin Galactic won’t see any meaningful positive catalysts until at least June 2022. This is because the company’s mothership, Eve, is grounded until that date. The analyst also believes that the company’s Delta class will not begin service until 2026.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
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