What happened
Space stock Virgin Galactic Holdings (SPCE 3.15%) drifted skyward on Wednesday, rising by 4% in value. The rocket boost came from an analyst tracking the company, now bullish on its prospects. Virgin Galactic's move easily eclipsed the S&P 500 index on the day; this only drifted less than 0.1% higher.
So what
That prognosticator was Alembic Global Advisors' Pete Skibitski, who now believes Virgin Galactic can be classified as neutral at a price target of $4.75 per share. Prior to that, he had recommended it as underweight (i.e., sell). The contents of Skibitski's analysis weren't available for review, so the reasoning behind the recommendation upgrade on the space stock is unclear.
Regardless, it isn't surprising that a stock-watcher is becoming more optimistic about Virgin Galactic's prospects. At the end of May, the company successfully launched a crewed space flight. This was a great relief to its investors, as this was the first such journey in almost two years.
That July 2021 flight, by the way, carried company founder Richard Branson. So the ensuing delay was more conspicuous than it otherwise might have been.
Now what
All evaluations of Virgin Galactic's shares, whether from professional financial analysts or ordinary folk simply considering an investment, should recognize that this is a highly speculative stock. It has yet to launch meaningful commercial operations, despite its lengthening record of success with test flights.
Virgin Galactic bulls are very encouraged by these flights and clearly believe the company can morph into a reliable business, shuttling people and cargo into space on the regular. But we need to bear in mind that it remains some distance from reaching this goal.
