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Virgin Galactic Holdings Inc. (NYSE: SPCE) successfully flew to space for the first time since 2019 on May 22 (Saturday). As a result, the stock jumped 24% the following Monday.
But Virgin Galactic stock has much higher to go in a space industry poised to reach $1 trillion by 2040, according to Morgan Stanley. That's nearly triple its 2020 value of $350 billion.
Virgin Galactic will almost certainly share in that growth.
Saturday was the first time Virgin could light off the rocket motors since February 2019. A flight last December was aborted when its rocket failed to ignite. In February of this year, a second attempt was scrubbed because of electrical interference with the craft's avionics.
Two pilots and a payload of NASA research equipment went up on Saturday's flight. The flight also helped collect data that the Federal Aviation Commission needs to approve Virgin Galactic for commercial space flight.
It was Virgin Galactic's third spaceflight, the first to take off from and return to Spaceport America in New Mexico.
The next test will be later this year. It involves two pilots and a full cabin of people into space.
Following that test, the next flight will take company founder Richard Branson into space.
The successful test flight represents a giant leap forward for the company's plans to lead human spaceflight for individuals and researchers.
Here's what you should know about this space stock meanwhile.
What Virgin Galactic Stock Offers Investors Today
Investors have responded favorably as the stock rose by more than 20% on Monday.
Shares of Virgin Galactic lost as much as two-thirds of their value after the difficulties with the last two attempts at space flight. Now that these difficulties are behind it and it can start thinking about selling tickets again, we could see the stock recover relatively quickly.
Virgin has plenty of cash on hand, more than $600 million, according to the latest report. That means funding the next several test flights should not be a problem for the company.
In addition to the space tourism experience it will sell, Virgin intends to position the company as a platform for research and astronaut training. One of the next three test flights will happen with a team of researchers from the Italian air force studying the effects of microgravity in the human body.
Space travel will come next, and early investors could make an enormous amount of money when that happens. As we have already seen with the preface of this company over the past year, Virgin Galactic stock will likely continue its volatile runs.
Each successful test flight by Virgin Galactic and its main rival, Jeff Bezos' Blue Origins, will probably bring buyers into space stocks. However, each delay will likely cause some selling in shares of companies like Virgin Galactic.
Blue Origin has sold tickets for the first crewed flight of its New Shepard rocket in July.
Although Blue Origin rivals Virgin Galactic, a successful flight becomes good news for shares of space stocks overall. Virgin Galactic released a statement last week saying that a successful test would help normalize the idea of human spaceflight, spelling good news for the whole industry.
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The company will almost certainly play an important role in this new age of space travel.
Over the years, we expect to see Virgin Galactic offer more than just a tourist flight into low space. Its spacecraft could become a new ultra-fast means of commercial travel. They could become shuttles to space platforms and even space hotels at some point in the not-so-distant future.
Should You Buy Virgin Galactic Stock Now?
Now that the current round of test flights is finished and FAA approval is granted, Virgin will sell a multi-day space experience to would-be astronauts. The experience culminates in a spaceflight that includes views of Earth from space and several minutes of weightlessness.
All of these flights will take off from and return to Spaceport America in New Mexico. This is a 27 square-mile facility on the New Mexico desert. It is the first purpose-built commercial spaceport in the world. The area can support 6,000 square miles of restricted air space that allows for takeoff and landings without worrying about interference from commercial air travel.
The space travel business will, of course, have very high barriers to entry. It is no accident that billionaires own the two leading privately owned space travel companies. The research that goes into developing reusable spacecraft and rockets is incredibly expensive and requires deep pockets with lots of patience.
Virgin Galactic will be a top contender in the space.
Virgin Galactic stock is starting to recover the huge losses from the last year. Investors that want to enjoy the massive profit opportunity offered by the new space age should jump onto the stock for what should be a wild and wildly profitable ride.
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