Vaxart (VXRT)

Summary:  OVERPRICED

Score:  2/20
MOS: 0%
Share Price:  $3
Sticker Price:  $0

Vaxart is an American biotechnology company founded in 1969 and based out of San Francisco, CA.  They are focused on the discovery, development, and commercialization of oral recombinant vaccines administered using temperature-stable tablets that can be stored and shipped without refrigeration, eliminating the need for needle injection.

On 11/10, Yahoo Finance released an article titled “If You Had Bought Vaxart (NASDAQ:VXRT) Stock A Year Ago, You Could Pocket A 910% Gain Today.

Articles like this make it seem like it’s easy to make big returns as a trader.  The truth is, most traders lose money because timing a stocks short term movements in the market are next to impossible.  It’s like going to the casino and putting all your chips on black.

This article from Vantage Point Trading states that only 4.5% of traders actually make money.  And the ones that do are putting in a significant amount of time.  In fact, I’ve been interviewing traders over the last year (primarily for entertainment purposes) and one trader I know makes about 50% per year by working 10 – 12 hours per day (5 – 6 days per week).  As he states “trading is actually a lot more work than people think.”  I don’t know about you but my time is much more valuable.

As most of you know by this point, Tykr is not for trading, it’s for investing.  As opposed to working for money, Tykr helps you flip the equation so money works for you.  In fact, you can be spending just a few minutes per week to make 50% returns per year.  That’s more like it!

The point is companies like Vaxart are the “shiny object” that makes people believe they can become rich overnight.

Let’s take a closer look at Vaxart…

  • In June of 2020 their share price was at $2.30
  • In July of 2020 their share price was at $16.90 (+634%)
  • In August of 2020 their share price was at $8.90 (-47%)
  • In September of 2020 their share price was at $4.90 (-44%)
  • Today their share price is $3.89

Timing the high points of that roller coaster ride are next to impossible.  Be careful with stocks like this.

Aside from the volatile share price they have some major red flags with the finances…

  • Although they were founded in 1969, they generate less than $10 million in revenue per year.  That’s far from impressive.  In fact, that kind of revenue is more closely aligned with a small business not a publicly traded company.
  • They have -$12 million in free cash available which means they have really high liabilities and expenses
  • They have -$2 million in debt.

With a score of 2/20, the financials are very weak.  Within a MOS of 0% (Share Price of $3 vs Sticker Price of $0) this stock is destined to lose you money in the end.