What happened

In reaction to news that there's a new coronavirus strain in the U.K., stock markets are tanking. The Dow is down 1% and the Nasdaq is off 1.6% in 10:45 a.m. EST trading. And yet one stock, at least, is glowing green today: Virgin Galactic (NYSE:SPCE).

So what

You can probably thank the friendly analysts at Cowen & Co. for that one. This morning, Cowen doubled down on its outperform recommendation on Virgin Galactic stock and assigned the shares a $30 price target, reports StreetInsider.com.

Red arrow goes down and green arrow goes up

Image source: Getty Images.

"SPCE remains in early innings given the lack of meaningful revenue and profitability," admits Cowen in its note, and the company's recent failed space-launch attempt is likely to "keep valuation at bay in the near term."

However, the company's transition toward a viable commercial business is at least "under way," argues Cowen, so the bank is raising its price target on the stock "on greater visibility of the $1bn spaceport revenue framework" that Virgin outlined last month. 

Now what

Cowen notes that its new $30 price target -- more than 20% above where Virgin Galactic stock trades today -- values the stock at an enterprise value that is "18x" what the analyst expects the company to collect "in outer years." The target implies a total company market capitalization somewhere around $6 billion, though, and factoring in an 18 times multiple to reach that valuation appears to be forecasting annual revenues closer to $333 million than $1 billion. And this is coming from an optimistic analyst who says you should buy the stock.

What's the big takeaway for investors here? Virgin Galactic may be promising $1 billion per year in revenue, per spaceport, across multiple spaceports ... sometime. But it's not going to happen anytime soon. Investors who want to own Virgin Galactic shares will need to be in this one for the long haul.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.