Virgin Galactic’s spacecraft Unity fires its rocket engine and heads to area on Feb. 22, 2019.
A Cowen survey discovered that greater than a 3rd of high net worth people could be interested by paying for a Virgin Galactic flight, giving a way of the demand for the firm’s area tourism service as soon as it begins flying prospects subsequent yr.
“Cowen’s proprietary survey highlights a high level of interest among high-net-worth individuals to fly to space at a ticket price of $250k or above,” analyst Oliver Chen stated in a observe to traders on Monday.
The agency estimated that Virgin Galactic’s suborbital flights have a complete addressable market of about 2.four million individuals, among people with a net worth of greater than $5 million. Of these people, Cowen’s survey discovered that about 39% are interested by paying a minimum of $250,000 for a ticket.
Virgin Galactic co-founder Sir Richard Branson, CEO George Whitesides and Social Capital CEO Chamath Palihapitiya pose collectively outdoors of the New York Stock Exchange (NYSE) forward of Virgin Galactic (SPCE) buying and selling in New York, U.S., October 28, 2019.
Brendan McDermid | Reuters
Cowen famous that “Virgin Galactic will face supply constraints to serve all interested individuals, given the limited capacity to fly passengers.” The firm at present has one spacecraft flying and has introduced plans to construct as many as 5 extra in the coming years, with two at present beneath development. Each spacecraft can carry as much as six passengers on a flight to the fringe of area, along with the two pilots that fly it. Cowen estimated that, if Virgin Galactic builds 11 spacecraft by 2030, the firm may “potentially fly ~3,400 passengers per year,” with flights almost daily.
“[Virgin Galactic] is uniquely positioned to benefit from the growing consumer interest toward luxury experiences, especially among high-net-worth individuals. We believe a substantial growth opportunity lies ahead with the commercial spaceflight business, which already has ~600 reservations,” Chen stated.
Shares of Virgin Galactic rose about 3% in buying and selling from its earlier shut of $17.46.
Cowen started analysis protection of Virgin Galactic on Monday, giving the inventory an “outperform” score and a $22 worth goal – which means the agency expects shares will rise 26% in the coming yr. Virgin Galactic has two extra take a look at spaceflights it plans to conduct earlier than flying founder Sir Richard Branson in the first quarter of 2021, which is able to market the opening of the firm’s business service.