Richard Branson took his Virgin ride into space this weekend, and as a reward, shares of Virgin Galactic plunged 18% yesterday.

That might seem perplexing, but we're going to show you why. And for those excited by the company's prospects now that it lodged a major milestone in the commercial space race, we'll also show you our long-term SPCE stock forecast.

Before we get to that, let's take a look at why SPCE is down today.

Why Virgin Galactic Stock Is Falling

The test flight of Virgin Galactic Holdings Inc.'s (NASDAQ: SPCE) went off without a problem, and Branson declared that the future of space travel from Spaceport America in New Mexico was now one step closer to reality.

The trip started aboard the company's mother ship and eventually released Space Ship Two and its passengers at the height of about 45 miles. Then, the spacecraft fired its rockets and reached a peak of 53.5 miles above the earth before heading back down. The passengers and crew enjoyed being weightless for around three minutes before the craft returned safely to Spaceport America.

In spite of the successful launch and landing, the tech stock was hammered today (June 12). The shares eventually moved higher, and then Virgin Galactic announced a stock sale of up to $500 million of stock in an add-on offering.

The combination of "buy the rumor, sell the news" traders and the weight of the stock offering was enough to push SPCE stock down today.

But it was a marketing success as Branson got to space nine days before Jeff Bezos is going up in a flight for his company, Blue Origin.

But the spectacle has many wondering just how viable a business space tourism will become. At the moment, Branson and Bezos are the only two people with space tourism companies. However, Elon Musk has expressed an interest in opening a third contender.

Musk is said to put down a $100,000 deposit on a seat on a future flight.

It is estimated that seat prices will be increased from $250,000 to $500,000 in the aftermath of the successful flight.

That's an enormous amount of money for a flight that took just about 15 minutes from start to finish and included a little over three minutes of weightlessness.

How many people are there in the world willing to pay that kind of money for an experience that short?

Virgin Galactic has more than 600 people who have put down a deposit for a future flight at the previously announced $250,000 level. It remains to be seen how many people will be interested in reserving seats when prices are doubled in the aftermath of this weekend's successful flight.

But we can do the math…

Our New SPCE Stock Forecast

We have doubts that enough people are willing to part with that kind of cash to fly into the bottom edge of space to justify the company's current $11.8 billion valuation.

Let's imagine that Virgin Galactic could send 700 people up to space at $250,000 and another 500 at $500,000. That adds up to about $425 million in revenue. That's not impressive compared to the valuation in the unlikely event it could get them all launched in one year.

And how many repeat customers would there be at that price?

How many years, or even decades, will it take before prices could come to a level that ordinary people could seriously consider a vacation that includes a space flight?

The current estimates from Wall Street have Virgin Galactic producing about $3 million in revenue this year, primarily from research projects aboard their flights, and lose over $300 million. Next year, sales are expected to be about $57 million with a loss of around $250 billion.

Keep in mind that Virgin Galactic stock fell way short of analysts' expectations in three of the last four quarters, so the losses could be much bigger.

Those estimates also assume nothing goes wrong and that Bezos does not capture more of the space travel dollar by offering travelers a spaceflight aboard a reusable rocket ship that will travel about 10 miles higher than the Virgin Galactic spacecraft.

There is no question that commercial space travel is very cool. However, it is also very expensive and likely to stay that way for a very long time. While it is great that billionaires get to indulge their childhood fantasies, we are not sure it's a good stock to buy yet.

To keep funding the company until there is some possibility of actual profits, the stock sale announced on Monday will not be the last. As a result, buyers of the stock can expect to see their holdings dilute over time.

Richard Branson's flight into space was fun to watch. Since Blue Origin will use an actual rocket launch to deliver Jeff Bezos into space, that is likely to be even more entertaining.

That does mean it is an investable business for outside non-control investors at this point in time.

The average SPCE stock forecast from Wall Street analysts over the next 12 months predicts a share price around $37, a 7% drop from today's price. That might even be too generous if it doesn't show a path to growing revenue sooner.