Despite Virgin Galactic’s (SPCE) successful recent mission to the edge of space and back, past technical issues, delays in flight tests, and potentially tough future competition are a few reasons why we think the stock is a risky bet and should be avoided now. Instead, we think the stocks of aerospace companies Lockheed Martin (LMT) and Northrop Grumman (NOC) have the potential to outperform the market given that they are driving the industry forward. Read on for insights into these companies’ prospects.After previous failed attempts, Richard Branson’s Virgin Galactic Holding, Inc.’s (SPCE) rocket-powered plane finally reached space. While the event was a milestone in Branson's nearly two-decades-long effort to achieve this. But now the plane is finally ready to ferry passengers to the edge of space, the company could face intense competition from Jeff Bezos’ Blue Origin, which plans to emulate SPCE beginning in July.
Furthermore, since the company’s last mission in December was aborted due to a fire in the engine, potential customers might have qualms about flying in the craft. Delays in its commercial space flights and flight tests amid increasing competition have made investors nervous about the stock’s future growth potential. SPCE’s stock has declined 3.2% over the past three months.
Conversely, the shares of two other companies in the space sector—Lockheed Martin Corporation (NYSE:LMT) and Northrop Grumman Corporation (NYSE:NOC)—are performing better than SPCE. And these companies have better financials. We believe these two companies are well positioned to capitalize on the space industry’s growth potential. So, it could be wise to bet on these stocks now.