Shares of Virgin Galactic Holdings Inc. (NYSE:SPCE) rose about 13.02% on Tuesday, recovering some losses from the recent slump that saw the stock touch a low of $7.67.
The last time the stock traded around $7 was in December 2019. At the current price of $9.20, Galactic is trading at a massive discount from a high of slightly above $57 which was reached on June 28, 2021.
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The rout in Galactic stock follows delays in the launch of its commercial test slights, which were scheduled in mid-2020 and are now pushed to the fourth quarter of 2022.
Even as Galactic prepares to release its fourth quarter and full-year 2021 results, some investors are a little cautious even if it reports estimate-beating figures. Bank of America analyst Ronald Epstein has a sell rating on the stock due to a lack of catalyst for growth in the short term, stock dilution from the latest issue of convertible notes, and expiry of lock-up.
Virgin Galactic stock attempts to rebound from the $7 level
On the daily chart, we can see that Virgin Galactic stock has been on a free fall but has found minor support at $7. Whether the stock rebound will be sustained is a key question that remains based on how much investor sentiment improves based on the company’s announcement during the fourth-quarter earnings call. The moving averages above provide resistance, and the stock is yet to break above the descending trendline.
Concluding thoughts
Poor investor sentiment can be blamed on the rout on Galactic stock. Investors are waiting on the fourth-quarter earnings call to hear more about the company’s test flight. Positive developments coupled with robust earnings could boost the stock.
Consequently, you could consider waiting for the fourth-quarter earnings call before considering a buy at the $7.27 bottom.
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