Is Virgin Galactic's share price likely to get another flight into space?

Virgin Galactic is currently the only listed company giving exposure to the space tourism industry. The company was created by Richard Branson, a British billionaire known for his out-of-the-box ideas and investments in the space industry. 

Space rollercoaster

The share price has experienced huge volatility after the IPO in 2019 and investors have become accustomed to speculative, spectacular share price rallies in the face of upcoming events. In the summer of 2021, Richard Branson aboard spaceship ‘Unity’ made a successful flight into space ahead of one of the world's richest men Jeff Bezos, owner of Amazon. Then a series of positive news stories caused the share price to skyrocket from around $15 in May 2021 to almost $60 within only 2 months. However, Virgin Galactic's share price has fallen by more than 80% since July 2021 and investors have had every right to be disappointed by the news released by the company over the last six months. 

The main factors that caused Virgin Galactic's shares to land back on the ground were the FAA (Federal Aviation Administration) investigation into the safety of the flight, the necessary ship upgrades and the postponement of the next flight until 2022/2023. There were also reports of SPCE.US shares being sold by insiders and Branson himself. Also recent sell-off in the technology sector and the return of fear in global stock markets put additional pressure, causing stock price to temporarily fall even below its IPO price.

Prospects of another rally

Virgin Galactic's shares have so far experienced seasonal rallies thanks to events that turned investor sentiment positive, and it seems likely that this will remain the case until space tourism becomes an integral part of the overall space market. The potential of the space tourism industry is still huge given how many people are willing to pay for space travel and the technology which is actually already available. Bank of America estimates that the growing space economy market will be worth at least $1.4 trillion by 2030 and Virgin Galactic could have a share of it.

SPCE.US has sold over 700 tickets so far, raising the price from $250,000 to $450,000 per ticket in the fall of 2021. It's worth mentioning that Virgin Galactic is also working on launching hypersonic travel services that enable people to travel from one point to another several times faster. The project is being conducted in cooperation with NASA and Rolls Royce, which raises additional prospects for the implementation of scalable services. 

Company announced that at the end of 2022 or  in the first quarter of 2023, we can expect another first real revenue-generating tourist flight. In mid-2022, according to SPCE's schedule, a flight in cooperation with the Italian Air Force, postponed from autumn 2021, should also take place. 

It is worth bearing in mind that, despite the negative sentiment of recent months, the company received FAA approval for the provision of tourist spaceflight services in June 2021 and achieved particularly significant milestones by completing a cycle of test flights and is in a position to start sending the first private customers into space. Given the above information in 2022 SPCE will have a chance to attract investor attention again, therefore behaviour of its share price is worth watching. 

Virgin Galactic Holdings INC (SPCE.US) shares have been moving in a downtrend since mid-2021. Looking at the daily time frame, a local double bottom formation may be forming around the $ 7.5 level, however the main sentiment remains bearish. In case of an upward correction, EMA 35 should act as the nearest resistance. This moving average managed to fend off bulls several times in the past. Source: xStation5