What happened

It was pretty much business as usual for Virgin Galactic Holdings (SPCE 6.74%) in July, with the company showing slow but steady signs of progress as it looks to commence its space tourism service. For a company best known for drama and delays, that was reason enough to celebrate, with investors sending Virgin Galactic shares up 23.6% for the month, according to data provided by S&P Global Market Intelligence.

So what

For the better part of the last year, the big news out of Virgin Galactic has been what is not happening. The company had hoped to launch scheduled service in time for founder Richard Branson's 70th birthday, back in 2020, but a series of testing mishaps and the impact of the pandemic have caused Virgin Galactic to delay its planned business launch for years.

The space stock lost half of its value in the first half of 2022 after the company delayed the launch of scheduled service until 2023, and investors had little reason to believe that the latest timeline would hold. So, when Virgin Galactic in late June and early July fired off a series of press releases announcing plans to build a new mothership for its spacecraft and disclosing where its new Delta-class spaceship would be assembled, investors breathed a sigh of relief.

Indeed, the most important thing in those releases could be that Virgin Galactic is sticking with its target to fly tourists into space by early next year. The company isn't making much, if any, revenue until that happens, so you can't even begin to think of it as a potential viable business until it can prove it can ferry paying customers into orbit on a regular schedule.

Now what

Virgin Galactic is moving in the right direction, but it still has a long way to go. The engineering that goes into space travel is difficult to get right, and investors can't rule out some unforeseen issue up ahead.

Even if scheduled service does commence as planned, Virgin Galactic still faces the challenge of proving there are enough people out there willing and able to pay six figures for a few seconds of weightless to make the business profitable, especially now that competitors including Jeff Bezos' Blue Origin have emerged on the scene.

Still, there is a lot more reason for hope now than there was a month ago. For those interested in the potential, just understand the risk, and make sure Virgin Galactic is part of a well-diversified portfolio.