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Virgin Galactic 'could really take off' if it breaks above this level, trader says as space stock gets analyst love

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Virgin Galactic gets another buy rating. Where traders see the stock headed

Virgin Galactic could be setting up for a sustained move higher.

Jefferies initiated coverage of the space travel stock with a buy rating on Tuesday, sending shares nearly 9% higher in the day's trading. On average, analysts covering the stock see roughly 28% upside for the name, with the highest price target sitting 87% above Wednesday's levels.

With the company solidifying its position in space tourism — having sent its founder, Richard Branson, on a historic space flight in July — its stock is becoming more attractive for longer-term buyers, Simpler Trading director of options Danielle Shay told CNBC's "Trading Nation" on Tuesday.

"We can look at it as an investment, although risky, of course," Shay said.

"With this company in particular, I'm looking at this five to 10 years down the line," she said. "They're the first in this space, they're the first people that are actually offering space flights to consumers, and I do believe in the long term [the stock is] going to blow up."

Shay's first target was $35, roughly 28% above where Virgin Galactic was trading midday Wednesday.

"If you could get through 35, then I would look to a return to previous highs," she said. "But once you really start seeing more reservations and actually more flights come through, that is when the stock could really take off."

Virgin Galactic's all-time high was $62.80. The stock was trading just above $27 on Wednesday.

Another trader wasn't so eager to jump in.

"The long-term narrative is certainly interesting. I would be wary here," Nancy Tengler of Laffer Tengler Investments said in the same interview.

Not only would all of Jefferies' assumptions — 660 flights per year and $1.7 billion in revenue by 2030 — need to come to fruition for Virgin Galactic stock to really take off, but some of the "smart money" has also moved elsewhere, said Tengler, her firm's chief investment officer.

She pointed to chairman Chamath Palihapitiya selling his entire personal stake in the company in March and Branson's sale of a large chunk of his stake in August.

"I'm a little suspicious because there's a lot of enthusiasm, but when it comes time for people to put money down for their reservation — right now they can just make a reservation — I think we'll get a better sense of whether or not the estimates that Jefferies has come up with are in fact realistic," Tengler said.

Virgin Galactic announced plans to reopen ticket sales in its August earnings report. Prices begin at $450,000 per seat.

Disclosure: Danielle Shay owns shares of Virgin Galactic.

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