Space Stocks: Is It The Right Time To Buy Them? - Kalkine Media

May 21, 2021 09:46 AM EDT | By Anuj
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Investing in future technologies has always been a bit speculative in nature. While space technology stocks have seen some pullback in the second quarter of this year, catalysts behind a long-term investment in the aerospace industry could be analyzed from the present evolution.

Stocks of Virgin Galactic (SPCE:US, NYSE:SPCE), for instance, plunged over 68 per cent to US$ 19.81 from its 52-week high of US$ 62.8 apiece. But on a week-to-date (WTD) basis, the scrips sharply rebounded by more than 22 per cent.

While the company has been reviewing its next flight, investors seem not-so-happy because of the delayed commercialization of its space services.

The heavy selling of its stocks has cast some dark cloud over its space venture. But this undervalued stock could be an option to explore after this week’s uptrend.

Canadian space technology company MDA Ltd (TSX:MDA), on the other hand, debuted on the Toronto Stock Exchange in early April 2021. After having a few blooming trading sessions in the beginning, the space stock tumbled in line with its peers.

But the advanced space technology and services provider could also rebound, led by the growth in the space industry.

The small-cap stock opened its first trading session at a price of C$ 14.14. It closed at C$ 15.13 apiece on Thursday, up seven per cent from its debut price.

Let us take a closer glance at these space stocks’ price performances.

Virgin Galactic Holdings Inc (NYSE:SPCE)

Virgin Galactic stock may likely overcome its bear market in the next one or two quarters and deliver long-term growth in the future.

It bounced back nearly 15 per cent on Thursday, and was trading around four per cent up during the premarket hours on Friday (7:15AM EST).


Virgin Galactic's One-Year Price Movement Against Trading Volume. (Source: Refinitiv)


On Thursday, the aerospace stock traded heavily, recording a one-day volume of 93.46 million shares against the 10-day average volume of 16 million.

The stock might extend its recovery trajectory in the upcoming sessions.

Virgin posted a loss of 55 cents per common share in the first quarter of 2021, failing to meet analysts’ expectations of a loss of 31 cents per common share. This was primarily caused by the non-commercialized nature of space flight testing and execution of its operations. 


MDA Ltd (TSX:MDA)

After posting notable gains in the wake of tis listing, MDA stock declined by 20 per cent against its all-time high of 18.88 (April 12, 2021).

The stock might take a cue from giant US-based firms in the upcoming session.
The company, meanwhile, expects to continue its flagship program as an international space mission partner and a satellite system, robotics and geo-intelligence innovator.

MDA's Listing-to-Date Price Movement Against Trading Volume. (Source: Refinitiv)

The indigenous company’s stock volume has dropped by 75 per cent to 15,800 shares against its 30-day average volume of 64,000 shares. If the stock bounces back to record a trading volume close to its debut level, it may rebound to its record high this quarter.   

The company posted an adjusted EBITDA of C$ 39.1 million in the first fiscal of 2021, up more than two times against that of C$ 17.1 million in Q1 FY20.


The above constitutes a preliminary view and any interest in stocks should be evaluated further from investment point of view.


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