On Monday, EF Hutton reiterated its buy rating on shares of GeoVax Labs Inc. (NASDAQ:NASDAQ:) with a hold price target of $18.00. The company’s endorsement comes as GeoVax is actively developing the Modified Vaccinia Ankara (MVA) vaccine to combat the outbreak of smallpox virus type 1 in the Democratic Republic of the Congo and its spread to neighboring countries. Smallpox is not typically prevalent in these areas, raising concerns about disease control and prevention.
GeoVax’s MVA vaccine program has gained significant attention due to discussions the U.S. government has had with the company. The MVA vaccine uses a weakened strain of the smallpox virus as a vector to deliver antigens, providing a safer alternative for immunocompromised individuals who cannot receive the original smallpox vaccine. The United States currently stockpiles this type of vaccine to protect against smallpox and variola virus as part of its Strategic National Stockpile.
Looking at GeoVax’s previous achievements, the company previously demonstrated that an experimental HIV vaccine using MVA as a vaccine vector was able to protect non-human primates from a lethal dose of Mpox. This success demonstrates the potential of the company’s MVA vaccine program to address the current Mpox challenge.
EF Hutton’s valuation model for GeoVax extends out to 2034, and includes a 30% probability of success on forecasted revenue. This rate is also applied to the company’s free cash flow (FCFF), discounted earnings per share (dEPS), and sum-of-the-parts (SOP) models. Using a fully diluted out-of-year share count that assumes multiple increases, the company arrives at an equal-weighted average price target of $18, rounded to the nearest whole number for the 12-month forecast.
In other recent news, GeoVax Labs announced that its cancer treatment Gedeptin has advanced to Phase 2 clinical trials. The decision was made after reviewing its Phase 1b/2a trial and a previous Phase 1 trial. Gedeptin demonstrated acceptable levels of safety and efficacy in the Phase 1b/2a trial, leading to the decision to move forward with further development.
GeoVax Labs was recently awarded a significant contract from the Biomedical Advanced Research and Development Authority (BARDA) to conduct a Phase 2b clinical trial of its COVID-19 vaccine candidate, GEO-CM04S1. The contract is valued at approximately $24.3 million and could increase to $45 million.
Analysts from Roth/MKM and HC Wainwright have initiated coverage of GeoVax Labs with a Buy rating, highlighting the potential revenue streams from its vaccine candidates, GEO-MVA and GEO-CM04S1. Roth/MKM’s outlook points to a strong future for GeoVax Labs, reflecting confidence in the company’s growth and revenue generation capabilities.
Finally, GeoVax Labs recently announced a $1.3 million direct offering, selling over 800,000 shares of common stock to an institutional investor. This is the latest development for GeoVax Labs, a company that actively contributes to global health initiatives through its advancements in vaccine research and development.
InvestingPro Insights
GeoVax Labs Inc. (NASDAQ: GOVX) has been a focus of interest for investors, especially in light of its vaccine development efforts. According to InvestingPro data, GeoVax has a market cap of $37.16 million, despite showing negative profitability metrics over the past 12 months as of Q2 2024, with a gross profit margin of a staggering negative 7178.39%. The company’s price action has been notably volatile, with a return of 225.35% over the past week, yet the stock price has underperformed expectations over the past decade.
InvestingPro tips that GeoVax is burning through cash quickly and has a Relative Strength Index (RSI) that suggests the stock is currently in overbought territory. Furthermore, the company is operating with a moderate level of debt and its short-term liabilities exceed its liquid assets.
For those considering investing in GeoVax, it is important to note that the stock generally trades with high price volatility and trades at a high P/E multiple. To delve deeper, here are 15+ additional tips from InvestingPro, which can provide additional insights into GeoVax’s financial health and stock performance.
EF Hutton’s bullish outlook may be balanced by these financial facts, which underscore the speculative nature of investing in biotech companies like Geovax. Investors should consider the company’s financial position, high volatility, and the broader market valuation of its shares when assessing the potential risks and rewards associated with Geovax shares. For those interested in a more comprehensive analysis, additional insights can be found on InvestingPro’s dedicated Geovax page.
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