Stock Analysis

Market Sentiment Around Loss-Making Vaxart, Inc. (NASDAQ:VXRT)

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NasdaqCM:VXRT
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Vaxart, Inc. (NASDAQ:VXRT) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Vaxart, Inc., a clinical-stage biotechnology company, engages in the discovery and development of oral recombinant protein vaccines based on its proprietary oral vaccine platform. The US$837m market-cap company posted a loss in its most recent financial year of US$19m and a latest trailing-twelve-month loss of US$25m leading to an even wider gap between loss and breakeven. Many investors are wondering about the rate at which Vaxart will turn a profit, with the big question being “when will the company breakeven?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

View our latest analysis for Vaxart

Vaxart is bordering on breakeven, according to the 3 American Biotechs analysts. They expect the company to post a final loss in 2021, before turning a profit of US$115m in 2022. Therefore, the company is expected to breakeven roughly 2 years from today. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 63% is expected, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

earnings-per-share-growth
NasdaqCM:VXRT Earnings Per Share Growth December 22nd 2020

We're not going to go through company-specific developments for Vaxart given that this is a high-level summary, but, take into account that generally biotechs, depending on the stage of product development, have irregular periods of cash flow. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.

Before we wrap up, there’s one aspect worth mentioning. Vaxart currently has no debt on its balance sheet, which is rare for a loss-making biotech, which typically has high debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.

Next Steps:

There are key fundamentals of Vaxart which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Vaxart, take a look at Vaxart's company page on Simply Wall St. We've also put together a list of essential factors you should look at:

  1. Valuation: What is Vaxart worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Vaxart is currently mispriced by the market.
  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Vaxart’s board and the CEO’s background.
  3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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