During the initial phase of the COVID-19 crisis, all eyes turned to the biotechnology sector to provide both treatments and eventually a vaccine. Naturally, companies that threw their hat in the ring – including previously lesser-known enterprises like CureVac (CVAC) – enjoyed a tremendous boost of relevance. Unfortunately for the segment, with fears of the SARS-CoV-2 virus fading, CVAC stock lost tremendous relevance.

However, CureVac again entered the limelight, this time for encouraging reasons when it “announced positive preliminary data from ongoing Phase 1 clinical programs in COVID-19 and seasonal flu, assessing both modified and unmodified mRNA technology,” according to its press release. On the day of the disclosure, CVAC stock jumped over 29%, reflecting renewed interest.

Scientifically, the development of the COVID-19 and seasonal flu vaccine represented an advancement off the groundbreaking mRNA-based Covid vaccines such as Comirnaty and Spikevax. In other words, the biotech industry wasn’t about to just let mRNA-based solutions focus exclusively on a past pandemic. Rather, the innovation could help address ongoing and contemporary matters.

Fundamentally, CVAC stock likely bounced higher on concerns about the so-called tripledemic or the combination of the flu, COVID-19 and respiratory syncytial virus (RSV). With RSV typically a worrisome condition for young children – though it can affect anyone at any age – CureVac on paper addresses the concerns many if not most adults have.

Of course, CureVac’s clinical studies likely won’t move the needle against the current wave of the tripledemic. However, with COVID-19 likely to become endemic – that is, the pandemic not ending with the disappearance of the SARS-CoV-2 virus – more tripledemic incidents may materialize in the future. In some ways, then, CureVac finds itself in pole position regarding the next major public health crisis.

Certainly, it appears that options traders have caught on, contributing to greater-than-normal volume for CureVac in the derivatives market.

The Bulls Move in on CVAC Stock

Following the close of the Jan. 6 session, CVAC stock represented one of the highlights in Barchart.com’s screener for unusual stock options volume. This stat shows the difference between the current volume and the average volume over the past month. Traders usually advantage this data to determine which stocks may be due for big moves ahead.

Specifically, CVAC’s volume level reached 4,656 contracts against an open interest reading of 18,854. Call volume hit 4,352 contracts versus put volume of 304. Further, the delta between the trailing-month average total volume versus the prior session volume came out to 918.82%. The implied volatility (IV) rank hit 29.33%, which indicates the (at the money) average IV relative to the highest and lowest values over the trailing one-year period.

To summarize, IV signifies the expected volatility of a stock over the life of an option. As certain influencing factors for the underlying investment changes, the IV will likely change as well. Further, as demand for an option increases, so too will its IV.

The IV low for CVAC stock was 59.83% on Sept. 20, 2022. Two months later on Nov. 17, CVAC hit its IV high of 126.19%. Prospective investors should note that per Barchart.com’s technical analysis gauge, CVAC ranks as an average 48% sell. Generally, throughout the time spectrum (short, medium and long term), CureVac rates bearishly. It’s not surprising given that in the trailing five years, shares hemorrhaged over 85% of equity value.

At time of writing, most covering analysts maintain a pensive view regarding CVAC stock. Three months ago, Wall Street experts rated shares as a “hold,” breaking down as one strong buy, one hold and one moderate sell. In the current month, both the consensus and the individual breakdown are the same.

Also, investors should note that CVAC stock currently features a 60-month beta of 2.50, which is wildly more volatile than the benchmark equities index. Thus, prospective buyers must exercise extreme caution despite the recent dramatic upswing.

A Calculated High-Risk Speculation

Although last Friday’s big move sparked excitement for CVAC stock, it’s helpful to consider a wider context. In the trailing year, shares gave up a staggering 72.34% of equity value. Also, on a weekly average basis, CVAC used to trade hands at well into triple-digit territory. At the moment, the stock is priced at less than nine bucks.

It’s stressed earlier with the 60-month beta but it’s worth emphasizing again: CVAC stock represents a high-risk, high-reward opportunity. Nevertheless, it does enjoy some positive fundamentals.

Against a broader view, CureVac represents a continuation of mRNA technology. According to Johns Hopkins Bloomberg School of Public Health, mRNA was first discovered in the early 1960s and research into its therapeutic potential was developed in the 1970s.

Effectively, we may be in the middle of a scientific renaissance. And CureVac apparently enjoys a front-row seat.

For the company specifically, it enjoys some positive attributes, such as a cash-to-debt ratio of 13.17 times, which rates better than the industry’s median value of 9.3 times. And while recent sales performances weren’t all that hot, on a trailing-12-month basis, its three-year revenue per share growth pings at a lofty 96.1%.

These stats don’t dismiss the negative profit margins and the below-parity free cash flow, among other challenges. However, if CureVac’s new mRNA initiative succeeds, it could skyrocket CVAC stock.

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