Virgin Galactic shares rise after Branson’s successful spaceflight to the edge of space

Virgin Galactic founder Sir Richard Branson and his team successfully flew to the edge of space and back in the VSS Unity on Sunday. The success of the spaceflight is a big win for the commercial space tourism industry.

The company’s shares slightly rose on Monday after the news of the successful test broke out with Branson aboard. Shares of Virgin Galactic (SPCE) were up 2% in premarket trading at about $50.42. The company’s stock has doubled since the beginning of the year as it anticipates the launch of its commercial space travel by 2022.

“We view Branson’s achievement as a massive marketing coup for Virgin Galactic that will be impossible for the public to ignore,” said Ken Herbert, Canaccord Genuity equity analyst. He added that the company has a buy rating but the $35 price target on its stock is below its current level.

Virgin Galactic’s VSS Unity launched into the skies of New Mexico from Spaceport America on Sunday with two pilots manning the vessel carrying Branson and three employees. The VSS Unity was supported by a carrier aircraft called VMS Eve – after its release at 40,000 feet, it fired its rocket engine and accelerated at a high speed toward the edge of space, reaching an altitude of 86.1 kilometers (53.5 miles), about 282,000 feet.

AB Bernstein analyst Douglas Harned said the firm has a market performing rating on Virgin Galactic as it believes that the commercial space tourism company is on an important path “toward starting passenger flights, which will happen in early 2022.”

VSS Unity is designed to accommodate up to six passengers alongside the two pilots. Virgin Galactic has roughly 600 reservations for ticked on future space flights, sold between $200,000 and $250,000 per seat. Passenger ticket sales are yet to be announced, however, analysts expect them to sell higher between $400,000 and $500,000.

Virgin Galactic isn’t the only space tourism company that is making progress toward launching. Jeff Bezos’s Blue Origin also has a test spaceflight scheduled for July 20. Its success will mark another big win for the industry.

“The flight is symbolically important for building consumer confidence in and demand for space tourism,” Harned said. “A successful test flight by Blue Origin including founder Jeff Bezos, scheduled for July 20, should generate further interest in the industry, which would benefit both companies.”

Branson said it has always been his dream to fly to space since he watched the Apollo moon landing. In 2004, he founded Virgin Galactic in a move to share his dream with other people as well as to make spaceflight accessible to all. After nearly 17 years, the company is almost set to launch into space commercially.

Virgin Galactic’s Sunday flight is one out of the three flights scheduled for this year, ahead of the main launch in early 2022. Sunday’s spaceflight was rescheduled to happen earlier, after Jeff Bezos announced that he would fly on Blue Origin’s first passenger spaceflight on July 20. Branson’s move came nine days earlier to beat Bezos’s plans. This makes Branson the first billionaire space company founder to fly on his own spacecraft into space.