What happened

Virgin Galactic (NYSE:SPCE) is pretty new as companies go. Although the company didn't technically "IPO," its reverse merger into Social Capital Hedosophia Holdings only took place in October -- and since then, the company has already racked up two new buy ratings on Wall Street.

Actually, make that three.

This morning, investment banker Morgan Stanley became the third Wall Street bank to endorse Virgin Galactic, and as of 10:55 a.m. EST, Virgin Galactic stock is already up 13.5% in response.

WhiteKnightTwo airplane carrying SpaceShipTwo spaceplane in flight

Image source: Virgin Galactic.

So what

Aside from the fact of the rating, what exactly did Morgan Stanley have to say about Virgin Galactic that got investors so excited this morning?

As related today on TheFly.com, Morgan Stanley analogizes an investment in Virgin Galactic to an investment in a "biotech-type" stock. On the one hand, this stock could crash and burn if one of its spaceships ever crashes with passengers aboard. But on the other hand, it might succeed and become the first-ever commercial space tourism company, outdistancing all potential rivals.

Now what

And then there's the third hand. What really gets Morgan Stanley excited about Virgin Galactic is the possibility that after (1) not crashing and (2) building a viable -- but niche -- business in space tourism, Virgin could (3) eventually succeed in "the third phase of the VG business model" and give birth to a business offering hypersonic air travel from point to point around the world.

This long-term possibility, says Morgan Stanley, is the real reason it is initiating Virgin Galactic stock with an overweight rating and a $22 price target -- $10 for the space tourism business and $12 more for the even farther-out hypersonic travel business.

Between those two theses, the analyst thinks Virgin Galactic stock could potentially nearly triple in value over the next year.