Shares of American spaceflight company Virgin Galactic Holdings (NYSE: SPCE) are in the green today, closing at $19.55 with an uptrend of 4.27% as of November 1st, (23:56 EDT). Since successfully flying founder Richard Branson into orbit, the company hasn’t provided any reasons for investors to cheer. October was particularly bad for the company, where the shares ended the month with a decrease of 25.9%.
Virgin Galactic Holdings – Technical Analysis
According to the company’s financial statement, Virgin Galactic Holdings has a market cap of $5.029 billion with total assets worth $684.016 million. Revenue for 2020 was at $238,000 with a profit margin of -114720.59% compared to $3.78 million in 2019.
Moving averages such as Exponential Moving Average (20)(20.78), Simple Moving Average (20)(21.04), Exponential Moving Average (30)(21.75), Simple Moving Average (30)(22.18) and Exponential Moving Average (50)(23.45) are indicating a sell action. On the other hand, oscillators such as Stochastic RSI Fast (3, 3, 14, 14)(27.89), Williams Percent Range (14)(−75.24), Bull Bear Power(−1.65) and Ultimate Oscillator (7, 14, 28)(40.10) are neutral.
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Virgin Galactic has experienced a rough 2021 both as a stock and as a company. It started the year with the hope of launching commercial space flights by the end of the year, resulting in millions of dollars in revenue. However, both delays, as well as investigations into the company by regulators, have stalled any such plans that might have existed. It is worth noting that the company has successfully flown a crew to space.
The company has previously been investigated by the Federal Aviation Administration. In a statement emails to news organizations, it announced that it was investigating reasons why Virgin Galactic’s SpaceShipTwo flew outside of the area for which it was cleared during a July 11 flight. The FAA has barred Virgin Galactic from conducting any flights during the course of the review.
The deviation, although minor, warrants a look by the FAA and it won’t be a long-term set back for the company. There, however, exists some reputational risk. Few are going to pay for the service if they feel it’s not safe enough for space travel. The debut flight was aimed at demonstrating how reliable the service was. However, it has now turned into an eyesore of the company. Based on this new risk, many investors are moving to the sidelines as the long-term impact is still not fully understood.
Should You Buy SPCE Shares?
In spite of all the hurdles, there are positive things ahead for Virgin Galactic that investors can look forward to. The successful debut flight validated its spaceplane technology. This increases confidence among investors who are not viewing it as a concept stock anymore. Demand for commercial space flights also seems to be increasing, as the company resumed ticket sales some time back at a price of $450,000. This is an increase of $250,000 per ticket from its previous $200,000 price tag.
The private space industry is still in its early stages and is seeing more competitors with the likes of Elon Musk’s SpaceX and Jeff Bezos’ Blue Origin entering the scene. However, Virgin Galactic remains the only publicly listed space tourism company, which can attract more attention from investors looking to invest in this area. While the shares are difficult to value objectively at the time being as it does not generate revenues just yet, the risk to reward prospects of the shares have certainly improved in the last couple of months. With that being said, and considering all of the above factors, investors can certainly pick up SPCE shares at the moment.
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Virgin Galactic Holdings Share Price Forecast November 2021 – Time to Buy SPCE? – Economy Watch