Virgin Galactic has gained nearly 150% this year through Friday's close in a speedy rally that's outpaced automaker Tesla's torrid 91% rise in the same timeframe. Shares of the space tourism company surged as much as 35% to a new high in early trading on Tuesday. Adam Jonas of Morgan Stanley thinks the stock price could "use a breather." While he's constructive on Virgin Galactic, "the move in the stock price of late appears to be driven by forces beyond fundamental factors," he wrote in a Tuesday note. Watch Virgin Galactic trade live on Markets Insider. Read more on Business Insider.
Virgin Galactic is rocketing higher in a rapid surge that's even outpaced Tesla's record-breaking rally. So far in 2020, Virgin Galactic has gained a searing 148% through Friday's close. In the same timeframe, Tesla has gained 91% in a torrid rally that's led analysts and traders to question the stock's underlying fundamentals. The space company founded by Sir Richard Branson continued to beat the automaker's gains this week. Virgin Galactic spiked as much as 35% in early trading Tuesday to a fresh all-time high of $38.72 per share, while Tesla gained as much as 8%. Virgin Galactic's momentum is continuing from Friday when the stock closed 21% higher after the company announced that it had moved its spacecraft VSS Unity from Mojave, California, to New Mexico, where it will one day shuttle passengers to and from space. The recent rally has led at least one Wall Street analyst to question the stock's climb, saying that the share price could "use a breather." "We are constructive on the story and rate the stock overweight," Adam Jonas of Morgan Stanley wrote in a Tuesday note. "However, we must acknowledge that the move in the stock price of late appears to be driven by forces beyond fundamental factors." When Morgan Stanley first initiated coverage of Virgin Galactic in December, its $60 bull-case target represented over 700% upside, he wrote. Today, however, the shares have about 100% upside after just two months. Jonas also wrote that while Friday's move of the VSS Unity had "some important learnings," he didn't see it as one of the more ambitious tests for the company. "We believe the investment community still has much more room to better understand the potential of the emerging space economy," he wrote. In the future, Morgan Stanley thinks the company could even move beyond the $60 bull case as it "executes on key milestones and moves from proof-of-concept to industrial and commercial success." Virgin Galactic has a consensus price target of $18.50 and three "buy" ratings according to Bloomberg data. The company is due to report is fiscal fourth quarter 2019 earnings on February 25 after market close. Join the conversation about this story » NOW WATCH: A big-money investor in juggernauts like Facebook and Netflix breaks down the '3rd wave' firms that are leading the next round of tech disruption
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Billionaire puts more than fifth of stake up for sale to help prop up airline and...Billionaire puts more than fifth of stake up for sale to help prop up airline and rest of groupCoronavirus – latest global updatesSee all our coronavirus coverageSir Richard Branson is to sell $500m (£405m) in Virgin Galactic shares in order to prop up his airline and leisure interests, which have been ravaged by the coronavirus crisis.In a statement to the New York Stock Exchange, Branson’s Virgin Group said it intended to sell 25m shares via a series of transactions, prompting a 5% fall in the share price of Virgin Galactic during pre-market trading. Continue reading...
We spoke with a Robinhood trader who says he made a 2,500% return from Tesla's stock rally. Here's how he did it. | Markets Insider
A Robinhood trader said he turned $5,000 into more than $130,000 thanks to Tesla's wild stock...A Robinhood trader said he turned $5,000 into more than $130,000 thanks to Tesla's wild stock rally. A Reddit user with the name Kronos_415 said he netted the twenty-six-fold return in under a month by trading call options. He argued that an $800 stock price was fair given Tesla's innovations and aggressive expansion. "Anything beyond $900 for Tesla is purely speculative, as their financials can't legitimately back a valuation that high yet," he said. Visit Business Insider's homepage for more stories. A Robinhood user said he turned $5,000 into more than $130,000 thanks to Tesla's remarkable stock rally this year. The trader, who has the username Kronos_415 on Reddit, said he netted the twenty-six-fold return in under a month. He told Business Insider that he's a 28-year-old business analyst in Washington, DC, who began investing six months ago. He declined to share his name. The amateur investor and member of the WallStreetBets subreddit first bought Tesla options on Robinhood's stock-trading app on January 3. He made the decision after reading a slew of good news about the company, including the opening of its new Gigafactory in Shanghai and the first deliveries of its Model 3 cars in China. The electric-car maker's stock surged more than 50% last month, to about $650 from $430. As a result, Kronos_415 was able to turn his "meager" $5,000 into $51,000, he said. Next, he spent nearly $27,500 of his earnings on seven Tesla calls on February 3. Each of the options granted him the right to buy the stock at $700 until February 21. After the stock surged, he sold each call — worth $3,925 when he bought them — for $17,025, more than quadrupling his money. Read more: An investor crushing 98% of his peers told us why Tesla's meteoric rise echoes the dot-com bubble era — and warns it's super-dangerous to buy now Kronos_415 said his Tesla windfall totaled almost $131,000. A screenshot that he shared in the WallStreetBets subreddit backed up his story. Tesla surged nearly 30% over Monday and Tuesday, prompting numerous skeptics to warn that its gains weren't sustainable. Indeed, the stock closed 17% lower on Wednesday, at $735. However, Kronos_415 argued that the run-up was warranted. "I feel that the rally this week is well deserved," he told Business Insider. "The strides Tesla is making in terms of battery technology combined with their aggressive rollout of vehicles and factories in emerging markets shows that they are hungry. "I think a fair market price is $800," he continued. "When I saw it reach $900 to $950, I expected the pullback. Anything beyond $900 for Tesla is purely speculative, as their financials can't legitimately back a valuation that high yet." Kronos added that he wouldn't be surprised if Tesla stock more than doubled to $2,000 in the next few years. In the meantime, he said he planned to grow his profits in an "aggressively managed" brokerage account, potentially leaving $5,000 to continue trading options on Robinhood.Join the conversation about this story » NOW WATCH: A big-money investor in juggernauts like Facebook and Netflix breaks down the '3rd wave' firms that are leading the next round of tech disruption
Faith in Elon Musk’s company has driven its stock to new heights. But detractors think their...Faith in Elon Musk’s company has driven its stock to new heights. But detractors think their skepticism will be vindicated in the end.