Virgin Galactic is sold to CFRA due to competition risk (NYSE:SPCE)

Михаил Руденко

CFRA began covering Virgin Galactic Holdings (NYSE: SPCE) with a sell rating.

SPCE currently has approximately 800 customers who have deposited deposits for future flights, with commercial operations expected to begin in the first quarter from 2023 at the rate of one flight per month. After the VSS Imagine goes live in 2023, the company’s spaceflights will increase to three per month. However, significant losses are expected in the meantime.

Analyst Keith Snyder and his team forecast a loss of $1.50 per share for SPCE in 2022 and a loss of $1.19 per share in 2023, which is worse than consensus estimates

SPCE Breakdown: “While it will take several years to go through the current list of customers, our sell recommendation reflects our view that its main competitor, Blue Origin, has already commenced commercial operations and is offering tickets at a cost much lower than the $450,000 charged by SPCE per seat, and companies like SpaceX could easily enter the space tourism market with its vastly superior, flight-proven launch technology.

The CFRA assigned a price target of $4.50 to SPCE against the 52-week trading range of $5.15 to $52.76.

Virgin Galactic (SPCE) rallied 13.05% Thursday after the company announced a mothership partnership with Boeing’s Aurora Flight Sciences. Short interest on SPCE is just under 25% of total shares outstanding.

The Seeking Alpha Quant rating on SPCE has been selling strongly since last year.

Martin E. Berry