Virgin Galactic (SPCE) could see its revenue hitting $1 billion in the next 10 years from nothing today, analysts estimated Monday as they size up the space tourism market. Virgin Galactic stock rose.
XCowen analysts initiated coverage on SPCE stock Monday with an outperform rating and 22 price target, saying it "is uniquely positioned to benefit from the growing consumer interest toward luxury experiences, especially among high-net-worth individuals."
Cowen sees commercial spaceflights boosting Virgin Galactic's revenue to $1 billion by 2030. The company currently has no revenue as commercial service has yet to begin.
But based on a Cowen survey, analysts see a total addressable market of 2.4 million people with a net worth of more than $5 million globally. Cowen then estimates Virgin Galactic can potentially fly about 3,400 passengers per year to suborbital space by 2030.
Additionally, those forecasts don't include another business opportunity: space tourism flights to orbital space.
"Of note, SPCE is also likely to conduct orbital spaceflights, such as traveling to the International Space Station, which targets individuals with a net worth of $50 million+," Cowen added.
Analysts noted that Virgin Galactic has a contract with NASA to provide an orbital astronaut training program and take on the role of broker to find customers and organize transportation.
Spacecraft options for reaching the space station include the SpaceX Crew Dragon, Boeing's Starliner, and Russia's Soyuz.
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Hypersonic Market Seen Boosting Virgin Galactic Stock
Shares climbed 2.5% to close at 17.90 on the stock market today. Boeing (BA) shares fell 2.3%. Boeing's venture capital arm HorizonX has a $20 million minority stake in Virgin Galactic.
Cowen analysts also see an even bigger opportunity in high-speed point-to-point travel that could disrupt the airline industry. They estimate total market of roughly $1 trillion, translating to $200 billion in sales for Virgin Galactic by 2050.
Point-to-point travel "is in very early innings but we believe the company has the resources, capital, and experience to pursue this business line."
Virgin Galactic said in February that it sees a "huge opportunity" to apply high-speed global mobility technology to reduce travel time. Then-CEO George Whitesides told CNBC at that time the company wants to integrate its vehicle into national airspace systems, allowing it to land at airports and link to local transport networks.
Follow Gillian Rich on Twitter @IBD_GRich for space news and more.
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