Is it worth holding on to Evax

Evaluating whether to retain or divest Evaxion Biotech (EVAX) stock involves analyzing recent financial performance, market conditions, and growth prospects in the biotech sector. Below is a structured assessment to guide your decision.

### 1. Financial Performance
- **Recent Price Movement**: The last price recorded for EVAX was $2.37, experiencing a decline of 8.14% in the last trading session.
- **Revenue and Income Metrics**:
- Total revenue for the latest report period ending September 30, 2024, was $3.02 million, but the net income showed a decline, recorded at -$1.94 million.
- The diluted EPS for the same period was reported at -$0.04, reflecting a year-over-year growth of 0.81%.

### 2. Market Position and Analyst Sentiment
- **Growth Potential**: InvestingPro indicates a projected revenue growth of approximately 49.75% for FY2024. Despite recent underperformance, this forecast suggests potential for recovery.
- **Analyst Ratings**: H.C. Wainwright has maintained a “Buy” rating with a target price of $14, pointing to significant anticipated upside from current levels.

### 3. Cash Position and Funding
- **Recent Public Offering**: Evaxion successfully executed a public offering, raising approximately $10.8 million, which is expected to fund operations into mid-2026. Their current pro forma cash balance stands at $22 million, sufficient for upcoming clinical developments.
- **Future Funding**: Further funding from potential licensing agreements with Merck could provide an additional cash influx of up to $10 million in 2025.

### 4. Market Risks and Headwinds
- **Regulatory Challenges**: The company has faced concerns regarding possible delisting from Nasdaq, although it has secured extensions and taken actions to restore equity above the threshold.
- **Broader Biotech Sector Risks**: The biotech sector is undergoing turbulence, which may impact stock performance across the board, particularly given the one-year change of -87.18% for EVAX.

### Conclusion
Evaxion Biotech presents a complicated picture. While there are promising indicators with a strong cash position and the potential for future growth, the volatility in the biotech sector and ongoing operational losses warrant caution.

- **Recommendation**: If your investment strategy can accommodate higher risk for potential long-term gains, holding onto EVAX could be worthwhile, especially given the favorable analyst sentiment and projected revenue growth. However, if you prioritize immediate profitability and are risk-averse, it may be prudent to consider diversifying your portfolio by reallocating funds to more stable sectors such as AI or US tech stocks.

In summary, the decision to hold or sell should align with your investment goals, risk tolerance, and market outlook for the biotech sector.