VSS Unity will reach the edge of space during its third space flight on May 22, 2021.
Virgo Galactic
Following the company’s successful space test on Saturday, Virgin Galactic shares rose Monday.
The launch was a critical step forward for the space tourism company as the test was delayed by more than six months after an attempt was abandoned in December.
Michael Colglazier, CEO of Virgin Galactic, told CNBC that space travel is “flawless” and he looks forward to the Federal Aviation Administration reviewing flight details – as the company needs to clear two remaining regulatory milestones before obtaining a key license could get.
Virgin Galactic’s shares rose approximately 15% in early trading from the previous close of $ 21.07. The stock has also offset its year-to-date loss after falling more than 30% earlier this month after previous setbacks and sales by notable shareholders during the year.
Three more space tests
VSS Unity fires its rocket engine shortly after the start of its third space flight on May 22, 2021.
Virgo Galactic
Saturday’s space test was the first of four remaining tests before it begins flying commercial customers. The next spaceflight test will carry four passengers to test the spacecraft’s cabin, while the third test is to fly founder Sir Richard Branson.
Bernstein, who has a market rating on the stock, has raised its price target from $ 18 per share to $ 27 per share.
“We believe that this business can have a highly attractive profitability if risks can be managed. We have reset our valuation model to our previous base case,” wrote Bernstein analyst Douglas Harned in a statement to customers.
Harned noted that the success of the flight increased the likelihood that the next three spaceflight tests “will be completed on schedule”.
However, Harned emphasized that two main risks remain to the company’s stock.
“First, any serious incident could be catastrophic for the company. Second, the terminal value is unclear as it is difficult to assess how far the value proposition will extend,” said Harned.
Virgin Galactic previously forecast that commercial service would begin in mid-2020. This year, the company pushed that target back to early 2022, stating that it would begin commercial service once the four spaceflight tests and a maintenance period are complete.
Become a smarter investor with CNBC Pro.
Get stock picks, analyst calls, exclusive interviews and access to CNBC TV.
Sign in to start a free trial today.