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Virgin Galactic (SPCE - Free Report) fell into the lower atmosphere of the Zacks Ranks once again -- not because of the recent engine failure incident, but because Wall Street analysts keep lowering their revenue and profit estimates.
Like some of my favorite promising Biotech companies with emerging R&D for life-saving therapeutics, I hate to write this article about something as grand as a space travel company.
In fact, I grew up watching the original designers of the technology that won the X-Prize -- the Rutan brothers -- at the EAA (Experimental Aircraft Association) Fly-In at Oshkosh in many summers of my youth in the 1970s.
Their revolutionary forward canard control surfaces and rearward "pusher" propeller aerodynamics were bold and inspiring. In fact, I just saw a Vari-EZ model fly over my Wisconsin farmland two days ago and I stood in awe as if anyone who had seen it for the first time.
How Do You Value The AmazingFuture of Space?
But investors who are as enthusiastic about the technology platform as I am -- see my January 2020 article and video Virgin Galactic Stock Takes Off Before SpaceX and Blue Origin -- need to understand how investing in SPCE will be a turbulent ride.
First off, even though the business genius of Richard Branson has amassed sizable advance ticket sales for the orbital rides he's offering around our great blue sphere, the multiple-year delays in actual passenger travel have dampened further ticket purchases.
And this dynamic makes the $5+ billion stock trade at over 100X next year's projected sales of just $50 million.
That's rich by any measure -- even for moon-shots.
Secondly, even if the dreams of space rides do generate rising revenues that bring the valuation back down to earth, it will be a long-term and luxury-tied prospect of distant future fortune.
Think ultra-private jet rides for the ultra-wealthy.
In other words, it's not a mass market opportunity any time soon. Most who can afford the ride may rather buy a Ferrari.
Still, it's an amazing and very concentrated time period of space R&D we are living in.
It may not be quite as exciting as the genomic revolution.
But -- and hear me out -- the Rutan clan did turn the $10 million Ansari X-Prize in 2004 (created by Peter Diamandis and funded by private donations from an American-Iranian engineer and astronaut, Anousheh Ansari) into a vision of realistic space travel that may gain astronomical traction in this century.
It's a dream I have lived for.
I just want investors who feel the same way to slow down on buying the stock as the best way to experience the dream.
Let SPCE come down -- and the estimates start heading back up. The Zacks Rank will let you know.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2021.
Image: Shutterstock
Bear of the Day: Virgin Galactic (SPCE)
Virgin Galactic (SPCE - Free Report) fell into the lower atmosphere of the Zacks Ranks once again -- not because of the recent engine failure incident, but because Wall Street analysts keep lowering their revenue and profit estimates.
Like some of my favorite promising Biotech companies with emerging R&D for life-saving therapeutics, I hate to write this article about something as grand as a space travel company.
In fact, I grew up watching the original designers of the technology that won the X-Prize -- the Rutan brothers -- at the EAA (Experimental Aircraft Association) Fly-In at Oshkosh in many summers of my youth in the 1970s.
Their revolutionary forward canard control surfaces and rearward "pusher" propeller aerodynamics were bold and inspiring. In fact, I just saw a Vari-EZ model fly over my Wisconsin farmland two days ago and I stood in awe as if anyone who had seen it for the first time.
How Do You Value The Amazing Future of Space?
But investors who are as enthusiastic about the technology platform as I am -- see my January 2020 article and video Virgin Galactic Stock Takes Off Before SpaceX and Blue Origin -- need to understand how investing in SPCE will be a turbulent ride.
First off, even though the business genius of Richard Branson has amassed sizable advance ticket sales for the orbital rides he's offering around our great blue sphere, the multiple-year delays in actual passenger travel have dampened further ticket purchases.
And this dynamic makes the $5+ billion stock trade at over 100X next year's projected sales of just $50 million.
That's rich by any measure -- even for moon-shots.
Secondly, even if the dreams of space rides do generate rising revenues that bring the valuation back down to earth, it will be a long-term and luxury-tied prospect of distant future fortune.
Think ultra-private jet rides for the ultra-wealthy.
In other words, it's not a mass market opportunity any time soon. Most who can afford the ride may rather buy a Ferrari.
Still, it's an amazing and very concentrated time period of space R&D we are living in.
It may not be quite as exciting as the genomic revolution.
But -- and hear me out -- the Rutan clan did turn the $10 million Ansari X-Prize in 2004 (created by Peter Diamandis and funded by private donations from an American-Iranian engineer and astronaut, Anousheh Ansari) into a vision of realistic space travel that may gain astronomical traction in this century.
It's a dream I have lived for.
I just want investors who feel the same way to slow down on buying the stock as the best way to experience the dream.
Let SPCE come down -- and the estimates start heading back up. The Zacks Rank will let you know.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2021.
Click here for the 6 trades >>