Review of Virgin Galactic (SPCE)
Portfolio – 2 stocks, share 0.36%, purchase price = $21.9.
Current capitalization = US$5.294 billion. P/E, PEG indicators are absent, as well as profit, and revenue is almost the same 🙈
What does the company do?
Develops and tests spaceships, which in the future are planned to be used for organizing tourist suborbital flights flights. Let's feel a little like Elon Musk 😍 and understand the terminology:
Suborbital flight - flight of an aircraft at a speed below the first one cosmic, that is, insufficient to launch a satellite into orbit.
First cosmic speed ~7.91 km/s
Orbital flight - correspondingly, flight at a speed sufficient to enter orbit.
Virgin Galactic’s flight pattern looks something like this: the carrier plane lifts into the air a rocket plane with 2 pilots and 6 passengers, at an altitude of 20 km the engines of the SpaceShipTwo rocket plane are turned on, it rises with the crew to an altitude of ~100 km. Next, the newly minted astronauts return to earth. The time in zero gravity is supposedly up to 6 minutes.
By the way, its closest competitor, Blue Origin (Amazon founder D. Bezos), has a completely different flight pattern: takeoff and landing are vertical. Using engine thrust, the device reaches an altitude of 45 km in 110 seconds, then the engines are turned off, the movement continues by inertia to an altitude of 100 km, then the transition to the landing trajectory follows. The total duration of such a flight is 10 minutes.
Coming back to Virgin Galactic, one of the key tests was scheduled to take place on November 19-23, but was postponed due to corona restrictions. If successful, a test flight with company founder R. Branson is planned for the 1st quarter of 2021, and then the company plans commercial launches with individuals on board. By the way, already now on Virgin Galactic website you can pre-order for only $1000 😳 According to the data, partial or full prepayment for More than 900 people paid for a ticket to space.
The estimated cost of the flight for Virgin Galactic is 250 thousand. $, Blue Origin – 150-250 thousand. $ Write to comments, how you will fly when you spend the required amount in Tinkoff Investments 😂
Will Virgin Galactic have customers?
According to analysts (data published before the corona hysteria), by 2028 the space tourism market could reach $3.5 billion per year (graphics in attachment), and ~80% will come from suborbital flights (they are cheaper). There are few competitors here, there are rumors about the participation of Elon Musk's SpaceX, although in my opinion, Elon's long-term goals are much more ambitious - the conquest of Mars, and not pleasure rides for the rich.
Are we buying?
All analysts' forecasts for SPCE are positive - everyone recommends buying, according to the forecast for 2024. Virgin Galactic's revenue will be $420 million and the company will break even (included are the revenue-profit dynamics for 2018 - 2020 and further forecast values).
There are only 2 stocks in my portfolio so far; at the moment, Virgin Galactic is definitely a pig in a poke and no one knows what the future of the company is, despite the rosy forecasts. Let's hope that SpaceShipTwo will fly the same way as Virgin Atlantic planes and Richard Branson will bring this endeavor to a victorious end. I definitely recommend SPCE stocks to your portfolios, at least to add some space and 🚀🚀🚀 but not more than 1-2%. I will not make price forecasts due to the lack of objective data, but of course I hope for growth.
Take care of yourself!
Ideas
November 20, 2020