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2020 has not been the most exciting year for IPOs. While the big coronavirus crash in March prompted a lot of investors to buy stocks on the cheap, the uncertainty has kept many companies from going public with their shares.
Of course, for every rule there are exceptions. Biotech IPOs have been as popular as ever amid the pandemic, and for good reason too: There's money out there for companies who can help end the pandemic.
We wrote about two hot biotech IPOs to watch last week. And one of them just went public to the tune of $213.3 million. That was 13.33 million shares at $16 a pop.
We're talking about the CureVac IPO that just took place the morning of Aug. 17.
As with all the best IPOs, CureVac N.V. (NASDAQ: CVAC) soared from the jump. CureVac is up 362% from its IPO price of $16, now at $75.
That's because not only is CureVac an exciting biotech stock, but it's also a promising coronavirus vaccine stock to watch.
Let's talk about how this company is looking post-IPO. Then we'll tell you whether CureVac stock is a buy today or not.
CureVac Stock Highlights
CureVac is one of the noteworthy international biotech stocks developing coronavirus vaccines. The results for its early-stage vaccine trials are due in Q4 2020.
The company's CEO, Franz-Werner Haas, said the company now has over 1 billion euros to put towards it coronavirus research.
The company is not in touch with the White House, but analysts say they could be favored by the German government. In fact, the German government has a 23% stake in CureVac today.
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If you're comparing COVID vaccine stocks, investment from world governments is one of the things you will want to note. Biotech stocks with the greatest potential in the United States are the ones taking the biggest jumps in price.
Moderna Inc. (NASDAQ: MRNA) is a good example here. The stock has risen over 260% since the start of the year, as it has progressed through coronavirus vaccine trials with support from the U.S. government.
Though the U.S. government has not invested in CureVac, the stock has caught the attention of world-renowned biotech companies and investing leaders. GlaxoSmithKline and Qatar Investment Authority are both stakeholders.
CureVac has $43 million in cash for the last 12 months, more than double from the $21 million it finished with in 2018. That shows its total free cash flow could accelerate as the company gets more attention.
The company has a steady revenue incline from 2018 as well. It's up 35% to $17.3 million from $12.8 million. Also expect this to grow if the company gains more international stakeholders and media coverage.
Is CureVac Stock a Buy Now?
Market conditions and an exciting IPO may send many investors flocking to CureVac stock in the coming weeks. But it's important for investors not to get lost in a hype.
There are plenty of promising biotech stocks out there. This could very well be one of them. But you can't take past gains as a sign of future growth.
The sad truth, for all we know, is that the gain on Aug. 17 could be the most CureVac stock ever pops. You could end up like Lyft Inc. (NASDAQ: LYFT) investors who thought they struck gold when Lyft stock hit $70 in its first few days, then tanked to $27, a loss of 61%.
Or, it could be worse. You could lose everything you put into a bad IPO.
For this reason, now that we have seen an initial pop from CureVac, it could serve you well to simply watch the news carefully to see how the company moves forward.
If you like the company, you like the decisions coming from the front office, and you see it playing a bigger role in the biotech industry, invest by all means.
But if you're looking for more assurance that your money is going toward something truly valuable, and not hype-driven, check this out...
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About the Author
Mike Stenger, Associate Editor for Money Morning at Money Map Press, graduated from the Perdue School of Business at Salisbury University. He has combined his degree in Economics with an interest in emerging technologies by finding where tech and finance overlap. Today, he studies the cybersecurity sector, AI, streaming, and the Cloud.