Inovio Pharmaceuticals Inc (NASDAQ: INO) has been a hot topic since the beginning of the COVID-19 pandemic. With a DNA-focused vaccine under development, investors have been excited about the ticker.
That excitement seems to be roaring to highs this morning after Oppenheimer initiated coverage on the stock. Here’s what’s going on:
Skip to What You Want to Read
- Oppenheimer Initiates Coverage on Inovio Pharmaceuticals
- This Could Be the Next Big Short Squeeze
- What Analysts Think About INO Stock
- Risks to Consider Before Buying INO Stock
- Final Thoughts
Oppenheimer Initiates Coverage on Inovio Pharmaceuticals
As mentioned above, excitement surrounding Inovio Pharmaceuticals is riding on highs this morning with strong price appreciation and volume taboot. So, what’s the deal?
Recently, Oppenheimer analyst, Hartaj Singh, initiated coverage on INO stock. The analyst set the rating to Outperform and provided a price target of $35 per share. Considering the most recent closing price of $13 per share, that price target represents the potential for gains in multiples.
Singh is particularly interested in the company’s COVID-19 vaccine, which he says not only has a differentiated profile but is moving closer to the finish line.
The analyst also pointed out that INO is currently working on a cancer vaccine. While it is in early stages, efficacy in glioblastoma has been intriguing.
Singh went on to explain that INO-4800 has a better safety and tolerability profile than currently approved vaccines, and it should generate higher uptake among low-risk populations. Moreover, the vaccine comes with easier storage and flexibility to adjust mutations.
Moreover, while the vaccine is exciting news, the overall power of the DNA platform at Inovio Pharmaceuticals should not be discounted as it could hold the key to solutions to some of the world’s most pressing medical problems.
This Could Be the Next Big Short Squeeze
Lately, short squeezes have been all the rage. With GameStop starting the process as Wall Street Bets took aim at hedge funds, investors are wondering what the next short squeeze might be.
Well, INO stock is a perfect target.
Recently, the group at Wall Street Bets waged war on hedge funds shorting biotechnology companies. Several posts appeared on the reddit suggesting that hedge funds that short biotech stocks are the worst of the worst, with many members vowing to tackle these targets next.
What could be a better target for these retail investors?
We’re talking about a stock that is garnering a positive opinion from one of the most respected analysts on Wall Street. At the same time, about 21% of the company’s public float is shorted, representing overwhelmingly high short interest.
Combine that with the fact that the Wall Street Bets Redditors are taking aim at hedge funds that short biotechnology stocks, and you’ve got a match made in heaven. After all, INO is working to find solutions for COVID-19 and various cancers.
So, I wouldn’t be surprised to see a massive short squeeze on the horizon.
What Analysts Think About INO Stock
Analysts seem to have mixed opinions when it comes to INO stock. At the moment, there are nine analysts weighing in. Three of the analysts covering the stock have Buy ratings, five of them have Hold ratings, and one analyst rates the stock a sell.
Price targets are also all over the board. Currently, the low price target is $13 and the high is $35, with a median price target of $16.14 representing the potential for a more than 20% upside from the most recent closing price.
Nonetheless, it’s important to remember not to blindly follow the opinions of analysts. Not only do analysts often have a biased view, by nature, their predictions are outdated shortly after they are made. However, analyst opinions are a great source of validation of your own opinions, once you’ve done your own research.
Risks to Consider Before Buying INO Stock
An investment in Inovio Pharmaceuticals, as with any other stock on the market, will come with risk. Some of the most significant risks to consider include:
- Clinical & Regulatory Risks. INO is a clinical-stage biotechnology company. That means that the company is highly dependent on both positive data, and positive opinions from regulatory authorities. If data from any of its clinical trials misses the mark, or regulatory authorities refuse to approve commercialization applications for any reason, the stock could see significant declines.
- Profitability. As a clinical-stage biotechnology company, Inovio Pharmaceuticals doesn’t make any money. It can’t because it is not yet able to commercialize its treatments. As a result, it has to rely on the money it has in the bank to survive. If this isn’t enough to get it through to approval, commercialization, and ultimately profitability, it may look to raise funds in the open market, leading to dilution of existing shareholder value and declines in the price of the stock.
- Speculation. None of the candidates at INO have made it through clinical trials and into commercialization. However, an investment in the company is a bet that they will. Since the future can’t be clearly seen, an investment in INO stock is a speculative bet.
Sure, there are risks to consider before diving into Inovio Pharmaceuticals stock, but in my view, those risks are outweighed by the potential the stock brings to the table.
I’ve been following INO and its DNA medicines platform for quite some time; long before the first case of COVID-19 was ever recorded. And I have to say, I’ve been impressed. This unique approach may provide opportunities to vaccinate against viruses like COVID-19, as well as a wide range of indications we thought there would never be a vaccine for, like cancer.
The bottom line here is that the science the company is doing is compelling to say the least, and it’s likely to result in marketable options that could become blockbusters as soon as they’re commercialized. All in all, INO stock is one to watch.