Altimmune stock tanks on report, should you buy the dip?

Altimmune (NASDAQ: ALT) share price experienced a significant decline on Tuesday following a report by Kerrisdale Capital, in which the investment firm disclosed a short position in the company’s shares.

Kerrisdale’s critical analysis suggests that Altimmune’s pharmaceutical endeavors may be fraught with challenges, dampening investor confidence and contributing to a bearish sentiment surrounding the stock.

Kerrisdale Capital’s short position

Kerrisdale Capital’s report raises doubts about Altimmune’s competitive positioning within the pharmaceutical landscape.

The firm argues that Altimmune’s drug faces formidable competition from existing incumbents as well as other GLP-1 agonists undergoing clinical trials. This skepticism is underscored by Kerrisdale’s assertion that Altimmune’s drug lacks the efficacy and market potential to compete effectively, casting doubt on the viability of its development pipeline.

Concerns over management and partnerships

In addition to questioning the prospects of Altimmune’s drug, Kerrisdale Capital also expresses skepticism regarding the company’s management capabilities.

The firm suggests that Altimmune’s management may struggle to gain a competitive edge over established players such as Novo Nordisk and Eli Lilly. Furthermore, Kerrisdale doubts the attractiveness of Altimmune as a prospective partner due to perceived limitations in its drug portfolio and development trajectory.

Market response to the report

The release of Kerrisdale Capital’s report triggered a decline in Altimmune’s stock price, with shares plummeting by over 14% to $9.90 per share.

While the stock initially dipped to $8.38, it eventually closed at $10.02. This downward trajectory reflects investor apprehension in response to Kerrisdale’s bearish assessment of Altimmune’s prospects.

Analyst coverage

Earlier this year, a Goldman Sachs analyst initiated coverage of Altimmune with a ‘neutral’ rating and a price target of $13.00. This cautious stance contrasts with Altimmune’s previous ratings, which included 6 buy ratings and 1 hold rating.

Altimmune’s recent stock performance underscores the challenges it faces, with a decline of -8.66% in the last month and -28.58% in the last 12 months. Despite this, there remains uncertainty surrounding Altimmune’s fair value, with Investing Pro indicating a fair value of $, representing a potential upside of 0.00%. However, this assessment comes with a caveat of high uncertainty.

What’s Wall Street thinks?

Wall Street exhibits a significantly bullish sentiment towards Altimmune.

According to Bloomberg’s tracking of seven analysts, the stock receives ratings equivalent to a buy from all but one analyst, with none recommending a sell. The average 12-month price target stands at $22, indicating a potential gain of approximately 150% from the current trading level.

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