Goldman says Virgin Galactic has potential, but warns investors of 'substantial question marks'

Virgin Galactic's carrier aircraft releases its spacecraft Unity during a glide flight test.
Virgin Galactic

(This story is for CNBC PRO subscribers only.)

Goldman Sachs began coverage of Virgin Galactic on Friday with a neutral rating, saying "substantial question marks" remain – making the firm the only one among nine on Wall Street to not recommend the space tourism stock to investors.

"Long-term upside potential could be substantial, if SPCE can capture the space travel and supersonic flight opportunity. But the time to realization of the opportunity is very long, customer adoption and recurrence uncertain, and potential for competition not insignificant," Goldman Sachs analyst Noah Poponak said in a note to investors.

Shares of Virgin Galactic fell 7.7% in Friday trading to close at $19.14. The stock is up about 65% this year. Other than Goldman, Virgin Galactic has the equivalent of buy ratings from Morgan Stanley, Bank of America, Vertical Research Partners, Cowen, UBS, Susquehanna, Credit Suisse and Alembic Global Advisors.

VIDEO20:2120:21
Space tourism is niche, so why are companies betting on it?