Markets

Why Vaxart Stock Soared 40% Today

What happened

Shares of Vaxart (NASDAQ: VXRT) 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.

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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.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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