What happened

Skyrocketing more than 59% in December 2019, shares of Virgin Galactic Holdings (SPCE -9.39%) extended their upward trajectory and climbed 42% through the first six months of 2020, according to data from S&P Global Market Intelligence. In addition to an analyst's positive take on the stock, the company's progress in its flight test program and its burgeoning relationship with NASA motivated investors to pick up shares of this high-flying space stock.

So what

While shares of Virgin Galactic significantly outperformed the S&P 500, which fell 4%, in the first half of the year, it hadn't exactly been smooth sailing for the stock. Hitting an intraday high over $42 in late February, shares subsequently plummeted nearly 70% and closed at $12.97 on March 23 as COVID-19 fears gripped the market, shaking investors' resolve. Things, however, started to look brighter the next day. Believing the sell-off in shares had left them undervalued, Adam Jonas, an analyst at Morgan Stanley, upgraded the stock to "overweight" from "even weight," assigning a price target of $24, according to Thefly.com. Investors rejoiced at the analyst's take, and the stock closed 26% higher from the day before.

VSS Unity glides home after second supersonic flight.

Image source: Virgin Galactic.

Besides the vote of confidence from Wall Street, investors celebrated the company's success in proving the capability of its spacecraft. In early May, for example, Virgin Galactic announced that it had completed the first successful solo flight of the VSS Unity in New Mexico, the location of the company's Spaceport America. Then, in late June, the company announced that it had scored another victory: a second successful test flight of SpaceShipTwo from Spaceport America.

Virgin Galactic's success in building a partnership with NASA gave shareholders more cause to send the stock skyward. In early May, for example, Virgin Galactic signed a Space Act Agreement with the space agency to produce supersonic aircraft for non-military applications. Speaking to the merits of the agreement, George Whitesides, CEO of Virgin Galactic, said the company sees "this as an area with tremendous growth potential that we will continue to invest in, alongside our commercial spaceflight operations."

Recently, the company announced the signing of another Space Act Agreement with NASA -- an agreement that aims higher: the International Space Station (ISS). According to the agreement, Virgin Galactic "will develop a new private orbital astronaut readiness program," which "will include identifying candidates interested in purchasing private astronaut missions to the ISS, the procurement of transportation to the ISS, on-orbit resources, and ground resources."

Now what

For investors with keen eyes on investing in the burgeoning space economy, Virgin Galactic represents a worthy opportunity -- especially since there are few publicly traded companies of its kind from which investors can choose. Nonetheless, like most growth stocks, future volatility is to be expected, suggesting that the stock should only remain an option for those investors with long-term investing horizons.