Virgin Galactic shares have been on a blistering run and analysts see a variety of factors driving the space tourism company's stock momentum, from investor excitement about space to speculation about the company's valuation. "Lately, we are having more conversations on SPCE than any other US stock in our coverage with the possible exception of Tesla," Morgan Stanley analyst Adam Jonas wrote in a note to investors on Wednesday. Jonas, well known for his early calls on Tesla, has recently been also looking at the fast-growing space industry. Shares of Virgin Galactic have climbed more than 170% since closing at a low of $7.22 in early December, just a month after it went public. The stock's 14% climb on Wednesday clinched its 10th consecutive day of gains in a row. That streak ended on Thursday, as it slipped 3% to close at $19.12. With growing investor interest in the space industry at large, Virgin Galactic ranks as the most high-profile pure-play space company on the public market, according to Renaissance Capital strategist Matt Kennedy. His firm specializes in exchange-traded funds based on initial public offerings (IPOs). "It's really the only stock like this," Kennedy said. "If SpaceX were public then [Virgin Galactic] would be valued against them, so if it had a close peer you'd think they would trade closer together. This stock is kind of unbounded." Overall, Wall Street's first take on Virgin Galactic has been an endorsement to buy. There are three firms covering the stock since its public debut in October – Morgan Stanley, Credit Suisse and Vertical Research Partners – and all three have buy ratings.

'Significant' investor interest

Morgan Stanley partially explained Virgin Galactic's rally by noting "a significant increase" in interest from investors, according to Jonas. "We have witnessed a materially greater frequency of incoming queries from investors to understand the pitch and learn more about the company's role in the rapidly evolving space economy," Jonas said. It's hard to tell exactly who those investor are right now because the stock is so new. The most recent filings show mostly just passive investors adding the stock, which they are required to do so to track certain indexes. Vanguard Group bought more than $90 million worth of Virgin Galactic stock across several index funds, while exchange-traded funds (ETFs) from Charles Schwab and BlackRock each took small positions. Virgin Galactic shares have been prone to large swings in either direction since its debut, a tendency which is typical of a small cap stock. But since the beginning of the year trading volume in Virgin Galactic has picked up dramatically. Until recently, only a million or two shares of the company traded hands each day. Yet FactSet data shows a remarkable tick up in the past two weeks: An average of about 12 million shares of Virgin Galactic exchanged each day, with almost 30 million changing hands on Wednesday alone. ARK Invest analyst Sam Korus explained that, thematically, investors are seeing space approach "a tipping point when you're looking at cost declines and the technology available." "There are a number ways to play the space sector in the market and Virgin Galactic is one of the most pure plays for space," Korus said.

Morgan Stanley maintained its overweight rating on Virgin Galactic shares, although Jonas noted the stock is now within 30% of the firm's $22 a share price target. But Jonas emphasized his most optimistic scenario of $60 a share is still in place, noting the stock would have to climb another 250% to reach that level.

A speculative stock

Virgin Galactic is a distinctively speculative investment, Kennedy noted, as the company has yet to begin flying customers to space – let alone realize the revenue it expects from commercial operations. Virgin Galactic plans to begin flying people such as founder Sir Richard Branson later this year. But until then Kennedy thinks Virgin Galactic's near $4 billion market valuation is in the eye of the beholder, as he says "this is a very hard stock to value." Like other analysts, Kennedy emphasized that he thinks Virgin Galactic's stock could just as easily go to $0 a share as it could quintuple. "When there's no revenue there's no floor, there's no ceiling. You're just valuing it years and years in advance," Kennedy said. "You have to be comfortable owning a stock that could be huge in 2040 and I think that's what you're getting with Virgin Galactic." Virgin Galactic's stock is also widely shorted, according to S3 Partners, as the firm said more than 25% of Virgin Galactic's shares are sold short. Short selling is the practice of borrowing shares from an investment bank and then selling them, in the hope that the stock drops and the investor can buy the stock back at a lower price. But if a stock price rises, short sellser are forced to buy the stock back at a higher price to cut their losses. And, if enough short sellers buy their stock back at the same time, it can create more demand and drive the stock price even higher. This is known as a short squeeze, a phenomenon Kennedy said might be happening in recent weeks with Virgin Galactic. "Some of the rapid rise could be people closing their short positions," Kennedy said.

Incremental progress toward flying tourists

The space tourism company has also been giving investors incremental progress updates on everything from its manufacturing process to filling out its executive team. On the latter topic, Virgin Galactic said its recent appointments – Michelle Kley as General Counsel and Enrico Palermo as Chief Operating Officer – were key to shoring up previously open leadership roles. CEO George Whitesides earlier this month told CNBC that the company has seen steadily increasing demand from prospective space tourists, saying interest "keeps ticking up by a good chunk every month." He announced that Virgin Galactic would re-open ticket sales later this year. Whitesides has also previously said that high demand for tickets means his company could increase its prices substantially for first commercial flights. Both Whitesides and Palermo have made several visits to New York City since the company's public debut, trips that the company describes as including productive meetings with investors.