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Why Vaxart Stock Soared 40% Today

By Joe Tenebruso – Jul 14, 2020 at 12:06PM

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Investors are growing increasingly bullish on the coronavirus vaccine maker's growth prospects.

What happened

Shares of Vaxart (VXRT 0.89%) rocketed 40% higher on Tuesday, furthering the biotech company's sharp ascent in recent days.

So what

On Monday, Vaxart's stock skyrocketed 52%, following bullish comments by B. Riley FBR analyst Mayank Mamtani. Mamtani began coverage of Vaxart and placed a buy rating and a $22 target price on its shares. Even after today's gains, his new price forecast represents a potential return of roughly 30%, based on Vaxart's current stock price of $16.97. 

A person in a business suit is pointing to an upwardly sloping stock chart.

Vaxart's stock surged on Tuesday. Image source: Getty Images.

Mamtani highlighted Vaxart's ability to produce a "broad pipeline" of potential vaccines from its cutting-edge oral vaccine platform. He's particularly intrigued by the prospects of the company's oral COVID-19 vaccine candidate, and he expects clinical studies to prove the effectiveness of Vaxart's approach.

Now what 

Investors are bidding up the shares of innovative companies with strong coronavirus-related growth prospects. Vaxart certainly fits that criteria, and its stock price has reacted in kind.

However, while Vaxart's experimental COVID-19 vaccine does have exciting potential -- not only for investors, but for people all around the world -- it has not yet proven to be both safe and effective.

Moreover, Vaxart has formidable competition in the race for a COVID-19 vaccine, including healthcare titans Pfizer, Johnson & Johnson, AstraZeneca, and more than 100 other companies. Investors, therefore, should view Vaxart as a relatively high-risk stock -- and size their positions accordingly.

Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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