Virgin Galactic (NYSE:SPCE) is the first vertically integrated commercial spaceline company. It manufactures the latest generation of space aircraft. And aims to provide a once in a lifetime experience for private individuals and researchers. Passengers will be propelled more than 80km above the Earth’s surface in a two and half hour trip, a few minutes of which will be without gravity. 

As exciting as this business may be, is it a good investment for my portfolio? Let’s take a look.

The winner of the competition 

Space tourism has become a billionaire’s race, with Sir Richard Branson taking the lead by scheduling the launch of Virgin Galactic just 9 days earlier than Jeff Bezos’ Blue Origin. 

A brand-new industry could be created if a successful attempt at space tourism was achieved. Plus, with around 600 $250,000 tickets already booked, the firm’s revenue stream appears ready to take off. But beyond space tourism, Virgin Galactic is also exploring the possibility of adapting its technology for rapid Earth-bound flights.

Currently, a flight between Los Angeles to Tokyo takes around 12 hours. But that could be cut down to roughly a third of that on a Virgin Galactic spacecraft. Needless to say, that could be a lucrative opportunity. And if successful, I believe the Virgin Galactic share price could surge even higher.

Potential risks that could be faced

Branson first announced his intention to develop a spacecraft back in 2004. The firm initially forecast the launch of its commercial services for 2007. Obviously, that didn’t happen. Due to continual technical challenges and failed test flights, which even resulted in the tragic death of a pilot in 2014, Virgin Galactic has struggled to get off the ground for the last 17 years.

While the company is finally getting ready to go into space, there still remains the risk of another potential catastrophe. Given that the Virgin Galactic share price is being elevated by prospects of future revenues, a crash would likely cause the stock to plummet. After all, if people don’t think the trip is safe, chances are they’ll look to a competing firm for their space experience.

Conclusion about Virgin Galactic

There is no denying that Virgin Galactic looks like a high-risk investment. If it successfully spawns a new industry of commercial space exploration, then the company could see its stock soar to new heights. On the other hand, all it takes is one fatal error to send it crashing back down to Earth.

It’s too soon to tell whether Virgin Galactic will become the industry leader. But personally, I think it can succeed. And so, while the risks are exceptionally high, I would consider opening a small position for my portfolio as a long-term investment.