Virgin Galactic’s Share Price and Financial Information in 2021
After years of raising money from investors, Virgin Galactic finally decided to go public on the New York Stock Exchange. It initially began trading on October 28, 2019. While many retail investors express interest in the company, the business does not currently earn a profit. Until commercial flights begin, Virgin Galactic does not have any major streams of revenue. Currently, the company actually loses $331,756 per employee. In addition to having an operating margin of -115,581.51 percent during its pre-revenue phase, Virgin Galactic has a return on equity of -48.32 percent.
Regarding a SPCE stock forecast…normally, a debt-to-equity ratio of 4.15 and a return on total capital of -46.54 percent would be a cause for concern. In this particular case, it makes sense for investors to compare Virgin Galactic to Amazon. During its first few years of operation, Amazon did not earn a profit. The first time it operated in the black was during the fourth quarter of 2001. Even then, the profits were minimal because Jeff Bezos wanted to prioritize future earnings over quarterly earnings targets. As a result, Amazon has become a behemoth in online sales and a perennial favorite among investors.
How popular will commercial space travel be? No one knows for sure. But companies that invest now will reap the rewards later. At the end of the first quarter of 2021, Virgin Galactic lost $0.55 per share. The amount of available cash in the first quarter dropped to $617 million from $666 million in the fourth quarter.
SPCE Stock Forecast – Profitability May Be Beyond The Horizon
While it may be years before Virgin Galactic is a profitable company, the 2021 test flight shows that a commercial program is possible. Some of the earliest travelers will be researchers from the International Institute for Astronautical Sciences. Additionally, the National Aeronautics and Space Administration (NASA) plans on funding scientific missions.
Other than hosting scientific experiments and offering flights for tourists, Virgin Galactic has another potential revenue stream. Virgin Galactic’s hypersonic speed means passengers can get from one continent to another in a record amount of time. Because of this, the company can eventually offer tickets for point-to-point travel. Boeing definitely recognizes the potential for point-to-point travel. The airplane manufacturer has invested $20 million in Virgin Galactic.
How do earnings affect a SPCE stock forecast? The future earnings of Virgin Galactic are unknown. In addition, there are other companies entering the industry already. Elon Musk’s SpaceX and Jeff Bezos’s Blue Origin are almost as far along as Virgin Galactic. This means they could potentially take away some of Virgin Galactic’s future revenue.
Final Thoughts
Last week The Oxford Club’s Chief Trends Strategist, Matthew Carr weighed in on space tourism and the future of travel.
As I’ve outlined here before, the space tourism industry is projected to be worth $8 billion by 2030. (Though that’s only a small slice of the $1.4 trillion the commercial space industry will be worth by then.)
At the moment, despite ticket prices of $250,000, Branson’s Virgin Galactic already has more than 600 people signed up to take flight when commercial operations set sail next year. It is far and away the leader in this category.
Many naysayers lament that commercial space travel is for only the most elite. And for now, that’s very true. But they’re missing the larger picture. Tourism is only one side of the business model.
The true opportunity for Virgin Galactic – as well as for SpaceX, Blue Origin and a growing number of competing space companies – is point-to-point travel. This is essentially leapfrogging from one point on Earth to another via suborbital spaceflight.
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