Virgin Galactic shares jumped in its best single day of buying and selling to this point this year on Monday, following the firm’s successful spaceflight test.

Saturday’s launch represented a critical step forward for the house tourism firm. The test had been delayed greater than six months after a December try was minimize brief.

Virgin Galactic CEO Michael Colglazier informed CNBC the spaceflight “was flawless” and mentioned he appeared ahead to the Federal Aviation Administration reviewing the flight knowledge. The firm must clear two remaining regulatory milestones earlier than receiving a key license.

Shares of Virgin Galactic surged 27.6% in buying and selling to shut at $26.89. The stock additionally erased its year-to-date loss. Earlier this month, it dropped greater than 30% for the year after earlier setbacks and gross sales by notable shareholders.

Saturday’s spaceflight test represented the first of 4 remaining earlier than it begins flying business clients. The subsequent spaceflight test will carry 4 passengers to test the spacecraft’s cabin, whereas the third test is deliberate to fly founder Sir Richard Branson.

Bernstein, which has a market carry out score on the stock, upgraded its worth goal to $27 a share from $18 a share.

“We consider this enterprise can have extremely engaging economics if dangers may be managed. We have reset our valuation mannequin to our prior base case,” Bernstein analyst Douglas Harned wrote in a notice to purchasers.

Harned famous that the flight’s success elevated the probability that the subsequent three spaceflight assessments “will probably be accomplished near plan.”

However, Harned emphasised that two main dangers nonetheless apply to the firm’s stock.

“First, any severe incident might be disastrous for the enterprise. Second, terminal worth is unclear, as it’s arduous to evaluate how far the worth proposition will prolong,” Harned mentioned.

Virgin Galactic beforehand forecast business service would start by mid-2020. This year the firm pushed that objective again to early 2022, saying it goals to start business service as soon as the 4 spaceflights assessments and a upkeep interval are full.