The coronavirus pandemic may have proven to be an extremely damaging disruption for many stocks but on the other hand, companies that have been working on a vaccine for the novel virus have seen their stocks make considerable gains.
One of the companies which have seen its stock record gains in recent times for the same reason is the small-cap biopharmaceutical company Ibio Inc (NYSEAMERICAN:IBIO). It is working on developing a coronavirus vaccine in tobacco leaves and the optimism around it has seen the Ibio stock generating gains of as much as 2000% in 2020 so far. Considering the massive gains made by the stock, it is worthwhile for investors to take a closer look at the stock and figure out if it is worth investing in.
Key Factors to Watch
Most market watchers, analysts, and investors believe that the rally has already gone too far. As a matter of fact, some have even gone a step further and stated that the rally in the Ibio stock might be fuelled entirely by speculative investing. On the other hand, an analyst who follows the stock has set the target price at $2.80 a share and that is lower than the current market price by as much as 40%.
In addition to that, it has also emerged that insiders within the company are selling the stock as well. Despite all these misgivings, nothing seems to affect the Ibio stock and it has continued to go higher.
One of the bigger reasons behind the rally is possibly due to the fact that Ibio has developed a vaccine development process named FastPharming that could accelerate production significantly. FastPharming is best suited for developing vaccines and proteins from plants.
While it is true that many might say that a faster way of producing vaccines is a significant breakthrough for Ibio, it is also important to note that it is still largely unproven. On the other hand, the rally in the stock has been entirely fuelled by the hopes of a coronavirus vaccine. Other than that, there is not much going with Ibio. Prior to the onset of the coronavirus pandemic, the stock was only trading at 20 cents a share.
If FastPharming does not deliver any proof, then it is unlikely that there is going to be any widespread adoption and hence, the rally in the stock could be said to be entirely based on speculation. That being said, it is also necessary to note that considering the rally in the stock in recent months, it is quite possible that the stock might continue to soar over the coming months. However, that does not change the fundamentals of the stock, which could be called shaky at best at this point in time.
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