Virgin Galactic Sets Next Flight Test for May 22; Stock Soars 15%

Richard Branson-backed space exploration company Virgin Galactic (SPCE) is gearing up for its next VSS Unity spacecraft test flight. The stock jumped 14.71% on Thursday to close at $19.81.

Virgin Galactic is focused on offering space tourism, and it competes with Jeff Bezos-led Blue Origin. The company has scheduled the next spaceflight test for May 22, subject to weather conditions. The flights are launched from a jet that carries the spacecraft to a certain altitude before releasing it to cruise on its own.

Virgin Galactic said it scheduled the flight after completing maintenance of the jet that will carry it, the VMS Eve.

“Following a detailed inspection and thorough analysis of our mothership, Eve, we have cleared our Spaceflight System for our upcoming flight,” said Virgin Galactic CEO Michael Colglazier.

The maintenance work that Virgin Galactic needed to complete on Eve involved additional engineering analysis of an item in the tail of the carrier jet. The company makes it a point to regularly check its vehicles to know when they may need modifications to improve performance.

A primary objective of the coming flight will be to test the correction work that it recently completed on the VSS Unity to reduce EMI levels. (See Virgin Galactic stock analysis on TipRanks)

Last week, Credit Suisse analyst Robert Spingam maintained a Buy rating on Virgin Galactic stock but lowered the price target to $33 from $42. The analyst noted that free cash flow (FCF) of -$50 million came in better than analysts’ expectations of -$69 million as FCF burn was better than expected.

“As SPCE continues toward commercial service, primary competitor Blue Origin is making progress as well, and may actually send up the first revenue passenger in July on a ticket sold via auction. Blue Origin’s New Shepard spaceship has performed ~15 test flights to date, though it has yet to carry any passengers, something Galactic has already achieved,” noted Spingam.

Consensus among analysts on Wall Street is a Moderate Buy based on 4 Buy and 5 Hold ratings. The average analyst price target of $33.33 implies 68.25% upside potential.

SPCE scores a 3 out of 10 on TipRanks’ Smart Score rating system, indicating the stock is likely to underperform the market.