Ocugen (OCGN) stock forecast: is there potential for growth?
09:36, 20 August 2021
There’s an old saying that it's “an ill-wind that blows nobody any good” and that certainly applies to Ocugen Inc (OCGN) stock.
In 2020, the biopharmaceutical firm Ocugen began developing a COVID-19 vaccine, Covaxin, in partnership with Bharat Biotech in India.
The decision by Ocugen, known for developing gene therapies for eye diseases, to turn its attention to engineering a COVID-19 vaccine – certainly had an impact.
The share price rocketed, going from a low of just $0.17 in the middle of 2020 to $3.07 per share at the start 2021. The stock continued climbing and by early February it stood at $15.81 per share before dropping back to around $9 per share in March. It then rose sharply in late April to $12.67 before falling back again. It closed the day on 19 August at $7.16.
It is fair to say that those who timed the investment right in Ocugen will have done very well but given the volatility this stock has shown, is it now a stock you should buy or stay away from?
In general, the biotech sector has been a good hunting ground for investors – in late August 2020 the Nasdaq Biotech Index stood at 4198.64. By 19 August 2021 it had reached at 5152.82, representing a 21% gain over a one-year period. Ocugen is just one of many in this space that have performed strongly – albeit with peaks and troughs along the way.
Ocugen stock analysis
Ocugen stock news has not been hard to come by as the company has figured on the radar of many investors.
In June, the US decided against giving emergency use authorisation (EUA) to Covaxin, the vaccine developed with Bharat Biotech.
Last week, Bharat Biotech provided a final analysis for Covaxin efficacy from clinical trials. The analysis demonstrated Covaxin to be 77.8% effective against symptomatic COVID-19, through evaluation of 130 confirmed cases, with 24 observed in the vaccine group versus 106 in the placebo group.
The analysis also showed Covaxin to be 93.4% effective against severe symptomatic COVID-19.
Under the terms of the partnership, Ocugen will take 45% of any profits that Covaxin generates in the US and Canada – assuming that the vaccine is made available there. But there are no guarantees of what these profits might be worth. Not only is there intense competition to provide vaccines in the US from the likes of Moderna, Pfizer, BioNTech, and Johnson & Johnson but the vaccination programme in the US is well advanced.
This could be considered as a risk factor by investors, but let’s not forget that the company still has an interest in developing ground-breaking treatments for eye diseases. According to the company’s second quarter 2021 earnings report, released on 6 August 2021, Ocugen’s first candidate gene therapy for targeting retinal diseases, OCU400, will undergo phase 1/2a clinical trials in the US later this year and is evaluating options to start trials in Europe in 2022.
Ocugen’s financial performance doesn’t bode well for the OCGN stock price forecast, however, with the second quarter results missing analysts’ estimates. The figures indicated that Ocugen experienced a loss of 13 cents per share. This is less than the 19 cents per share loss incurred in the same quarter a year ago, but is much greater than Zacks’ predicted loss of just three cents per share.
As the company does not have any approved products at the moment, it hasn’t disclosed any revenues for the second quarter. Meanwhile, Ocugen’s R&D expenses comprised $18.9m compared to $1.6m for the same quarter a year ago. The company’s general and administrative expenses also increased by 278% from $1.8m for the second quarter of 2020 to $6.8m for the second quarter of this year.
According to WallStreetZen, in 2023, OCGN is forecast to generate $290,183,513 in earnings, with the lowest earnings forecast at $166,954,898 and the highest earnings forecast at $365,710,729.
On average, analysts forecast that OCGN's earnings per share (EPS) will be $-0.25 for 2021, with the lowest EPS forecast at $-0.33, and the highest EPS forecast at $-0.12.
For 2022, analysts forecast that OCGN's EPS will be $0.25, with the lowest EPS forecast at $-0.25, and the highest EPS forecast at $0.65.
In 2023, OCGN's EPS is forecast to hit $1.46, with a maximum EPS of $1.84 and minimum EPS of $0.84.
Ocugen inc stock predictions and analyst ratings
According to the data by MarketBeat, five Wall Street analysts have chosen to cover the OCGN stock price forecast for the next 12 months. At the time of writing, 19 August 2021, they share a consensus rating of hold, with three analysts indicating that the OCGN stock is a hold, and two give it a buy rating.
This could be considered a moderately bullish forecast for the Ocugen stock. The average price target is $7.66, which is just 7% higher than OCGN last closing price of $7.16.
Back in June 2021, Roth Capital said that it expects to see OCGN reach a price target of $6, having previously predicted a price of $10 and rated OCGN stocks as “neutral”. Later on, in July 2021, Robert LeBoyer from Noble Financial initiated his coverage of the Ocugen stock, rating it as a buy with a price target of $6.80. The latest analyst rating came out on 9 August 2021 from Swayampakula Ramakanth from HC Wainwright. He gave it a buy rating and an optimistic price target of $10.00
These consensus estimates and recommendations are provided by analysts who track the evolution of the company’s fundamentals over time. They should not be taken as investment advice. These estimates are a reflection of their conclusions and views. They could be wrong. Investors should do their own research before investing in Ocugen stock or any other company.
Ocugen (OCGN) stock forecast 2021-2025
Algorithm-based stock analysis service Wallet Investor is currently bullish on Ocugen’s long-term share price trend. Rating the company a buy, its Ocugen stock analysis provides an OCGN stock price forecast of $14.675 in one year and forecasts the stock will be worth $44.848 in five years.
Stock research platform WallStreetZen, provides a slightly different picture. Based on four analysts’ ratings for Ocugen, it grades OCGN stock as a hold. Only one of the four analysts, HC Wainwright & Co maintains a buy rating, setting a target price of $10.
What is happening with OCGN stock?
The Ocugen share price has seen plenty of volatility during 2021, as investors have responded to the biopharma company’s development of a COVID-19 vaccine and progress in its gene therapy for degenerative eye conditions.
Is Ocugen stock worth buying?
It all depends on your risk tolerance. Biopharma companies such as Ocugen are susceptible to dramatic share price moves based on the outcome of clinical trials for their products. The upside can be dramatic; as too can the downside.
Will the Ocugen share price go up?
As we have seen from some of the research highlighted above, some analysts see the potential for the OCGN share price to return to double digits by the end of the year, others are less bullish and see the stock as a hold rather than a buy.
This is certainly not a Steady Eddie stock - as can be seen by the volatile moves in the share price. Although the success in vaccine development could boost the company’s stock, it has no approved products yet and no revenue to show. If you are willing to take the risk, make sure you base your decisions on your own fundamental and technical analysis as analysts' predictions can be wrong.
How to trade Ocugen shares with Capital.com
Are you looking to take a position on the Ocugen share price? You can try to profit from the stock’s ongoing volatility by trading its shares with contracts for difference (CFDs) at Capital.com. CFDs are financial instruments that allow you to speculate on the direction of a stock price without having to commit to owning the underlying shares.
If you expect the OCGN share price to rise you can open a long position, whereas if you think it will fall you can go short. As a leveraged product, CFDs are designed to maximise gains. However, you should be aware of the high risk involved as the use of leverage also magnifies losses if the asset price moves against you.
Make sure you understand how CFDs work and do your own research before you start trading. Never invest money you cannot afford to lose. As always, you should be aware that past price performance is no guarantee of future returns.
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