Virgin Galactic shares to soar 50% as space tourism becomes $3 billion market, UBS says

Virgin Galactic's spacecraft Unity flies to its new home in at Spaceport America in New Mexico on Feb. 13, 2020.
Virgin Galactic

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UBS began coverage of Virgin Galactic on Monday with a buy rating, saying it expects the space tourism company's stock to climb more than 50% in the next one year.  

"We see Virgin Galactic as the only way for consumers to gain entry into the ~560 member astronaut club in the next 5 years. There will be competitors, but the curation of the VG product from marketing to life-long brand connection, in addition to an operating model supporting a uniquely high flight-rate, separates the VG experience from the others," UBS analyst Myles Walton said in a note to investors.

UBS also expects that Virgin Galactic's annual sales of tickets for rides to the edge of space will be quadrupling within just a few years of the company beginning commercial services, with a compound annual growth rate of 300% through 2024.

Shares of Virgin Galactic rose 9.3% in trading from its previous close of $15.92. So far this year Virgin Galactic's stock is up more than 50%.