What happened

Like meme stocks will do from time to time, Ocugen (OCGN -5.98%) on Wednesday saw a notable price drop a day after a surge. The company was hit by quite a severe price target cut from an analyst, a move that ruined the party after Tuesday's post-earnings run-up.

So what

Before market open Wednesday, Noble Capital's Robert LeBoyer made a nearly 40% chop to his Ocugen target. He now feels the company is worth only $5 per share, down from his previous estimation of $8. Although he's notably less bullish on the stock's upside, he's nevertheless maintaining his outperform (buy) recommendation.

The reasoning behind LeBoyer's move wasn't immediately apparent. It hardly seems coincidental that it comes just after the biotech released its latest batch of quarterly earnings. The relatively early-stage company didn't book any revenue and more than doubled its net loss on a year-over-year basis. This performance was basically in line with analyst expectations.

Ocugen attracted investor attention during the tough days of the coronavirus pandemic as a developer of a covid vaccine. Its proprietary mucosal vaccine is still in development; meanwhile, the company holds the North American commercialization rights to Covaxin, which was developed by India-based Bharat Biotech. 

Now what

The big catch, as always, with Ocugen, is that Covaxin is not yet authorized or approved by the U.S. Food and Drug Administration (FDA), which is the big prize for any company holding North American commercial rights to a vaccine or drug.

On Tuesday, investors were encouraged that Ocugen more or less met third-quarter expectations, but the latest price target cut is a reminder that much of the company's potential remains unfulfilled.