Virgin Galactic Holdings Inc (NYSE:SPCE) continued its remarkable advance on Thursday, 28 May, with shares climbing 19.53% during regular trading before adding a further 14% in after-hours activity. The move positions the stock for a sixth consecutive day of gains and extends its cumulative rise to more than 83% over the past five trading sessions.
The rally has been driven by a combination of company-specific developments and growing enthusiasm across the wider space sector, which has attracted renewed investor attention ahead of the highly anticipated SpaceX public offering.
Successful VSS Unity flight boosts confidence
A key catalyst behind the recent share price surge was the successful glide flight of Virgin Galactic’s VSS Unity spacecraft on 27 May at Spaceport America in New Mexico.
The mission marked the company’s return to active flight-testing operations after a two-year pause and was viewed by investors as an important milestone in Virgin Galactic’s effort to resume commercial activities.
Management outlined plans to continue flight testing during the third quarter of 2026, with commercial operations expected to restart in the fourth quarter. The company also reopened ticket sales for approximately 50 future missions, with seats priced at $750,000 each.
Investors were further encouraged by signs of tighter financial discipline. Virgin Galactic reported a 26% year-on-year reduction in first-quarter operating expenses, reflecting efforts to improve cash management as it prepares for the next phase of operations.
SpaceX IPO drives broader sector enthusiasm
Beyond Virgin Galactic’s own progress, the stock has benefited from a powerful re-rating across the space industry following developments surrounding SpaceX (NASDAQ:SPCX).
Investor interest in the sector accelerated after SpaceX filed documentation for its planned initial public offering on 21 May 2026. The listing is widely expected to become one of the largest public offerings ever undertaken, with estimates suggesting a valuation of approximately $1.75 trillion.
The prospect of such a landmark transaction has sparked buying activity throughout the listed space ecosystem. Companies including Rocket Lab (NASDAQ:RKLB), Intuitive Machines (NASDAQ:LUNR) and Planet Labs (NYSE:PL) have all recorded strong gains as investors seek exposure to businesses connected to the expanding commercial space market.
Virgin Galactic has emerged as one of the primary beneficiaries of this trend. As one of the few publicly traded companies offering direct exposure to the space tourism market, it has attracted significant interest from retail investors seeking to participate in the sector’s renewed momentum.
The stock’s elevated short interest has also contributed to the move. With approximately 23% of shares sold short, continued positive sentiment could increase the potential for a short squeeze, adding further volatility to the share price in the weeks ahead.
Valuation concerns remain despite momentum
While market enthusiasm has driven Virgin Galactic sharply higher, some analysts remain cautious about the company’s valuation.
Consensus recommendations remain broadly neutral, with an average target price of $3.55, implying downside potential of approximately 21.63% from recent trading levels.
Critics argue that the company’s market value is increasingly disconnected from its underlying financial fundamentals. Virgin Galactic continues to generate limited revenue, trades at a price-to-sales ratio exceeding 200 and remains deeply loss-making at the operating level.
As a result, many investors continue to view SPCE primarily as a sentiment-driven or narrative-led stock rather than a business supported by established cash generation.
The sustainability of the rally may therefore depend not only on Virgin Galactic’s ability to deliver on its commercial flight plans, but also on whether investor enthusiasm surrounding the upcoming SpaceX IPO can be maintained once the initial excitement surrounding the listing begins to fade.
Virgin Galactic Holdings stock price