Sign InVirgin Galactic (SPCE) Stock Sees 9.22% Increase, First Commercial Spaceflight to Drive Growth
Summary
Virgin Galactic's stock price increased by 9.22% on June 28, 2023, due to positive anticipation for the company's first-ever commercial spaceflight scheduled for June 29, 2023, but the company's negative EPS and P/E ratio suggest long-term financial problems that could hinder its performance, resulting in a 'Hold' classification for the stock.
Overview
Virgin Galactic Holdings, Inc. (Ticker: SPCE) closed at $4.74 on June 28, 2023, a 9.22% increase from its previous close. This change is notable considering its highest and lowest prices have been $4.89 and $4.33 respectively. Across the year, SPCE's stock price has fluctuated between a high of $8.56 and a low of $2.98. With a market cap of $1.34 billion, the company traded a significant volume of 42.35 million shares, much higher than its average volume of 17.50 million. The next trading day for SPCE is June 29, 2023.
Fundamental Analysis
Virgin Galactic's earnings per share stands at -$1.60, resulting in a negative P/E ratio of -2.96 which means that the company is currently not profitable. An upcoming earnings announcement on August 2, 2023, might bring about some change in its financial status. Virgin Galactic's discounted cash flow (DCF) is $5.89, suggesting that the stock might be undervalued.
The analysts' consensus on the target price for the stock is $19.25, with a high estimate of $48 and a low estimate of $4. This broad range suggests both significant market uncertainty and potential for upside reward.
Technical Analysis
The 14-Day Relative Strength Index (RSI) for SPCE stands at 56. The 50-day moving average of $4.04 is lower than the last close, while the 200-day moving average of $4.60 falls slightly below the closing price. These figures suggest near-term bullishness but a potential long-term downturn. The MACD (3-month) value of 0.1777 suggests some bullishness in the short-term.
News Impact
Several recent news updates have positively influenced Virgin Galactic's stock. The company's stock price surged by more than 10% as investors anticipated successful results from its first-ever commercial spaceflight, scheduled to take place on June 29, 2023. The company has announced it stands ready to commence these flights from the edge of space, and this could act as a major growth catalyst for them. If successful, this will be a landmark achievement for Virgin Galactic and may positively impact the stock's performance.
Final Evaluation and Prediction
Based on this analysis and considering the excitement around the first commercial space flight, SPCE could realize some short-term increase in its stock price. For tomorrow's trading day (June 29, 2023), the company's publicized plans for its first commercial spaceflight could push up prices, especially if updates about the flight are positive.
However, the company's negative EPS and negative P/E ratio signal fundamental financial problems that could lower the stock's performance in the long term. Unless the company can turn this around with future earnings reports, there is a risk of returns falling short of investor's expectations.
Overall, Virgin Galactic can be classified as a 'Hold' based on these findings. While there are exciting prospects on the horizon, the market's high level of uncertainty and the company's current financial shape make it a risky bet over a longer timeline. Virgin Galactic could provide interesting investment opportunities if it successfully navigates its challenges and capitalizes on its growth opportunities, especially those in the novel industry of commercial spaceflight.
