Virgin Galactic Stock Has 25% Downside Risk, According to 1 Wall Street Analyst Firm
Space roller-coaster stock Virgin Galactic (NYSE: SPCE) took investors on a wild ride this week, soaring 10% Monday on news of progress building its Delta-class spaceplane, then tumbling 7% early Wednesday after reporting how much money its current Unity-class spaceplane is losing -- only to land right near where it began the week, around $1 a share.
But I think investors are overestimating Virgin Galactic's chances of success. This business isn't stable at all, warned Wells Fargo in a StreetInsider note Thursday. In fact, Virgin Galactic stock may fall as low as $0.75 per share, according to the note.
Good news first: Virgin Galactic beat on both sales and earnings in Q1. True, sales were only $2 million for this space stock that is valued in excess of $400 million. Also true, Virgin Galactic lost $0.25 per share in the quarter. Still, investors feared even worse news, and a beat is a beat.
Source Fool.com
