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Are Shares of Virgin Galactic a Buy Under $20?

Stock MarketsDec 08, 2021 10:31AM ET
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© Reuters. Are Shares of Virgin Galactic a Buy Under $20?

Virgin Galactic (SPCE) stole the headlines after completing a crewed spaceflight to the edge of space in July. Nevertheless, the company's shares have declined 20% in price over the past month because SPCE is struggling amid the rising competition in the industry. So, given SPCE's poor fundamentals and lofty valuation, is it worth betting on the stock at its current price level? Let's discuss.Virgin Galactic Holdings, Inc. (NYSE:SPCE) is an integrated aerospace company that focuses on spaceships and related technology for tourists and researchers. The Las Cruces, New Mexico-based company, rose to prominence after founder Richard Branson and a crew of five people flew to the edge of space on July 11 aboard SPCE's rocket plane.

However, despite the company's long-awaited accomplishment, SPCE’s share price has declined 55% over the past six months and 20% over the past month, closing yesterday's trading session at $15.62.

In addition, SPCE is currently trading at a premium valuation considering its poor growth prospects. In terms of its forward EV/Sales, the stock is currently trading at 822.41x, which is 41465.2% higher than the 1.98x industry average. Furthermore, SPCE's 1177.56x forward Price/Sales is 71140% higher than the 1.65x industry average. This, along with SPCE's weak profitability, could cause the stock to suffer further price declines in the near term.

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Are Shares of Virgin Galactic a Buy Under $20?
 

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Comments (1)
Alex Kosh
Alex Kosh Dec 10, 2021 5:07AM ET
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What is the industry average here? What another public company can take you to space?
 
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