Sign InVirgin Galactic's stock faces volatility, but commencement of commercial spaceflights offers potential upside. Hold for now.
Summary
Virgin Galactic experienced a 4.99% decrease in its last close on June 21, 2023, but with the commencement of commercial spaceflights, the potential for revenue growth could drive an upside revaluation of the stock, although caution is advised due to the stock's overbought status and high valuation in the short term.
Overview
Virgin Galactic Holdings, Inc. (SPCE) experienced a decrease of 4.99% in its last close on June 21, 2023, closing the day at $5.71. The company has recently commenced commercial spaceflights, marking a critical milestone for its business. Despite being free cash flow negative and having considerable risks, the start of revenue-generating activities could drive an upside revaluation of Virgin Galactic's shares.
Technical Analysis
The stock's Relative Strength Index (RSI14) is currently at 79, which indicates that it is in the overbought territory, suggesting a potential pullback in the short term. Its 50-day moving average is at $3.90, while the 200-day moving average is at $4.63. The stock's MACD (3-month) is -0.09. Given these technical indicators, the stock may face some short-term corrections, but the overall trend appears to be on the upside.
Fundamental Analysis
Virgin Galactic's current market cap stands at $1.61 billion. The stock has shown high volatility, with a price range between $2.98 and $8.555 over the past year. The average volume is 14.50 million, while the most recent volume stands at 55.99 million. The company's EPS (earnings per share) is -2.26, and the PE (price-to-earnings) ratio is -2.53, indicating that the stock is expensive based on its earnings.
Considering the discounted cash flow (DCF) analysis, the stock's value should be around $6.86, implying potential upside. The stock's targets are diverse, with a target high of $48, target low of $4, target consensus of $19.25, and target median of $10.
Recent News
Recent news items related to Virgin Galactic include the announcement of the commencement of commercial spaceflights, the death of Board Chair Evan Lovell, and discussions of the company's valuation.
Price Predictions
For the next trading day, on June 22, 2023, the stock may face some short-term corrections due to its overbought status. However, it could remain in an overall uptrend trajectory and experience price stabilization.
For the upcoming week, investors should stay cautious as the stock appears highly volatile. The commencement of commercial spaceflights could help drive the stock price upwards, with the potential to move closer to the discounted cash flow valuation of $6.86 or even higher.
Final Evaluation
Considering the company's entry into revenue-generating activities and the expected growth in space tourism, Virgin Galactic could provide potential growth opportunities in the long run. However, the stock's current overbought status and high valuation make it a risky investment in the short term.
Based on the available information, we consider Virgin Galactic to be a Hold at the moment. Investors should closely monitor the stock's performance and stay updated with company news to make informed decisions.
