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Analysis by Virgin Galactic (#SPCE)

Analysis by Virgin Galactic (#SPCE)

11 March 2021

Virgin Galactic is an American company that is part of the Virgin Group and plans to organize tourist suborbital space flights and launches of small artificial satellites. In the future, the company plans to offer its customers and orbital flights. The flight itself is an ascent to the 16-kilometer mark, then the SpaceShipTwo spacecraft undocks from the WhiteKnightTwo booster aircraft, it makes the further journey independently. Up to eight people can be on board the spacecraft at the same time: two pilots and six passengers.

It should be noted that the company is a monopoly in the emerging market for suborbital flights. However, we may soon see new companies competing with Virgin Galactic.

2020 Revenue: $ 238K (-94% YoY)

2020 Operating Loss: $ 275M (+ 29% YoY)

2020 net loss: $ 273M (+ 29% yoy)

The company was unprofitable even before the pandemic, and the crisis had a significant impact on its financial performance.

Despite the current financial performance, many large funds such as Mubadala, The Vanguard Group and BlackRock Institutional Trust believe in the company’s growth with substantial equity stakes.

Recently it became known that the first flight in 2021 will take place in May, which negatively affected the company’s stock quotes. Also in the past few weeks, there have been news that the company’s management is selling its shares. This can be a bad signal for investors.

Thus, investing in Virgin Galactic at this point can be called a controversial investment. On the one hand, the company operates in a completely new market and can potentially be its leader in the future. On the other hand, at the moment the company has too many financial and operational problems.

You can take the SPCE company right now, it would be better, of course, a couple of days ago at 25, but now the prices are quite good. Targets 45 and 62. The only thing to remember is that the company is young and too volatile, so you should not use the maximum threshold of 10% of the portfolio, it is better to limit yourself to 5%.

11 March 2021
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