Growth Stocks: Virgin Galactic

Virgin Galactic (SPCE.US) is a company within Sir Richard Branson's Virgin Group, which plans to provide manned suborbital spaceflight, suborbital launches for science missions, and orbital launches for small satellites. In the future Virgin Galactic plans to offer orbital flights as well.

Recent events

After recently reactivated its space program to offer tourist orbital flights, the company carried out its third test flight this past weekend, completing it successfully. to undock and start your own flight. continuing with the tests and on this same flight Virgin Galactic took the opportunity to carry out certain payloads for NASA, although its ultimate goal is not so much to carry out this type of load but to carry out people, specifically tourists.

Unlike SpaceX, Virgin Galactic's main objective is to continue the space race in the tourism field, so that it can profit and do business as soon as possible with the high costs involved in this type of activity. It currently has more than 600 reservations from individuals who want to go to space and who are willing to pay a whopping $ 250,000 for a ticket. Specifically SpaceX is more focused on space exploration to destinations much further away such as the planet Mars.

Before it will resume its space project at the end of 2019, since it went public in 2017 it has been trading practically on a flat encephalogram at around $ 10 per share. But the last year and a half has been a roller coaster ride where it reached a new all-time high at $ 62.5 and a new all-time low at $7.5.

For this year 2021 he hopes to carry out three additional flights where the first of them will have two pilots and 4 employees on board the ship, the second will have Richard Branson himself, founder of the company within the crew and the third will be the first flight officially contracted by the Italian Air Force.

Earnings

Regarding its income statement, we cannot really highlight much given that it has no income since it began to publish its results in Q3 of 2017, although operating expenses show a reflection of an approximate constant per quarter of 70 million dollars, basically the reported losses each quarter.

Virgin Galactic must be seen with a long-term perspective and as soon as it can monetize the business it is developing in space tourism is when we will be able to observe publications of comparable results. However, we can comment on the book value of the company or PB Ratio, which relates the market capitalization of the company with its Equity. Regarding this criteria, what we can confirm that Virgin Galactic is overvalued, since this ratio for the company shows a result of 11.9x compared to the average of the US aerospace & Defense sectir, which has a ratio of 2.7x

Chart analysis

Disregarding the analysis of the period prior to the end of 2019 where it reached historical lows, Virgin Galactic has been developing a volatile but positive evolution of the share price. From all the behavior we highlight that the periods of impulses and setbacks are accompanied by overbought and oversold areas in the RSI indicator.

source: xStation

Recently it has broken the bearish guideline of this indicator at the point where it also marked a new rising low at the $ 14 per share support zone during the second half of 2020. The convergence of the bullish guideline with this support marked the turning point to from which the Virgin Galactic share has appreciated more than 96% in a week to $ 27.7 per share. On the day after the last trip was completed, the company opened with a 25% bullish gap and the RSI, without having reached an oversold zone, should maintain the positive sentiment on the value.