Stick around in the business of assessing investment opportunities, and you’re bound to make your fair share of calls that go awry. That’s exactly what happened with my early June take on Vaxart (NASDAQ:VXRT). While I appreciated the company’s distinct approach toward a Covid-19 vaccine, I felt it was doing too little, too late. Therefore, I was skeptical of VXRT stock.
Well, I may need to reassess this narrative given that the underlying circumstances are beginning to change. Over the trailing week ending July 22, VXRT stock is up nearly 20%.
Now, as the Covid-19 crisis rears its ugly head again, you may be considering VXRT stock. At this juncture, it’s not a bad idea to make a speculative buy. But here’s why you may also want to be careful.
Changing Circumstances Could Boost VXRT Stock
The delta variant has driven a recent uptick in Covid-19 cases. According to a CNN report, Covid-related hospitalizations and deaths are on the rise, and most cases involve unvaccinated individuals.
Unfortunately, the Covid-19 virus has been much more durable than any of us would have liked. Thus, Vaxart’s Covid inoculation may be a viable option again.
Furthermore, VXRT stock bulls can bank on what makes its vaccine distinct from most other long-term solutions. Vaxart focuses on tablets, not injections, which could move the needle (no pun intended) in its favor.
As I mentioned back in November 2020 — and to be fair to myself, when circumstances were much different than they are today — millions of Americans are afraid of needles. For that reason, Vaxart’s pills may be much more palatable to some who are vaccine hesitant.
VXRT Stock Is in a Tricky Situation
On July 19, VXRT stock closed up 9.5% to start the week on a very auspicious note. Around the same time, the benchmark S&P 500 Index dipped 1.6%, putting Vaxart curiously on top of its 50-day moving average. This is a common technical gauge of near-term strength.
The volatility is a remarkable shift in tone considering the record-breaking surge in equities just days ago. Of course, it stems from investors’ fears of a Covid-19 resurgence. If the pandemic plays out according to pessimistic forecasts, VXRT stock may stand on favorable ground.
It’s not just about the palatability of orally administered vaccines. In tablet form, vaccines require no specialized equipment for transportation and storage. Compared to the strict needs of other vaccines, bullishness in Vaxart shares makes sense.
However, the surge will likely culminate with a different (and perhaps more favorable) outcome than when we first got hit with Covid-19. Obviously, this is due to the fact that a little more than 68% of U.S. adults have received at least one shot.
And even if only 59.5% of adults are fully vaccinated now, that’s still a heck of a lot more than when the crisis started. So a debilitating spread of infections might not be in the cards.
Also, there’s something to be said about how Americans have generally grown accustomed to Covid restrictions. If people need to go back to wearing masks and exercising social distancing, it wouldn’t be a shock to the system.
A Pill Might Not Help With Vaccine Refusal
In previous discussions about VXRT stock, I have consistently emphasized the company’s oral tablets. Given the choice, I think most Americans would choose tablets over needles even if they aren’t afraid of the latter.
But deep into the vaccine rollout, I don’t think administration is the issue. It’s the idea of the vaccine itself. As ABC News reported in late May, tens of millions of doses sat unused while the rest of the world was desperate for the preventative lifeline.
With that kind of reticence, no degree of palatability may change anything. Still, I’m not opposed to a speculative buy on Vaxart — especially if you’re convinced the crisis will worsen. But either way, I would exercise caution.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.
