Novavax remains a risky stock in a risky market

  • NVAX stock fell 16% this week, bringing the 12-month loss to over 88%.
  • The company is struggling to meet the income expectations of its Covid-19 vaccine candidate.
  • Demand for boosters is unlikely to change the math in the short term.

Novavax (NASDAQ: NVAX) made headlines this week as its share price fell nearly 16%. This came after President Biden’s statement that the pandemic was over. The president made these remarks during an interview with 60 minutes.



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If you are considering investing in NVAX stocks, I would be less concerned about the ongoing setback among public health and public policy experts. The truth on the ground is that for a great many people the pandemic does not play a significant role in their daily decision making. If it should is a topic for another day and people with much more knowledge of infectious diseases than this writer.

In this article, I’ll take a look at the opportunity, if any, that the NVAX stock offers investors.

The foundations are missing

The economic reality is that Novavax may have surpassed what investors can expect to see on the revenue front. Indeed, in the company’s latest earnings call, chairman and CEO Stan Erck said the company “did not expect new revenue in 2022 from the US and (its) COVAX (facility).” The company originally planned to sell 110 million and 350 million doses to the two entities, respectively.

However, the company still expects total revenue of $ 2 billion on the low-end and up to $ 2.3 billion on the high-end. The first half of the year is on the books and the company generated just under $ 900 million in revenue.

If the company gets an increase in the drop in vaccinations, that could happen, but it’s unlikely to change the fact that after producing its profitable first quarter in the first quarter of 2022, the company severely missed its second quarter earnings estimates. And significantly, perhaps, it offered no forward-looking indications for full-year earnings.

It was a great ride

I admit that if you were a speculative investor with the risk tolerance and discipline to execute a trading strategy, you probably did quite well with NVAX stocks. Less than a year after that March 2020 date, Novavax closed at an all-time high of $ 279.83. That would be about 2,700% gain.

But since that date, the stock has given up most of those gains. And the bigger question now is whether NVAX shares have the pipeline to move them higher.

It could, but it is unlikely that we will see such high peaks again. And barring new vaccine approvals, it appears NVAX shares may have more room to decline.

A meme title with a mission

It’s hard not to group Novavax with the other meme titles. As of this writing, NVAX shares are “still” up more than 162% since March 20, 2020, a date largely associated with the start of the pandemic. However, if you look at a broader target, the stock is just over 4% higher than it was five years ago.

What happened in the meantime was the great vaccine rush. And Novavax was offering a different candidate vaccine than other companies Pfizer (NYSE: PFE) And modern (NASDAQ: MRNA) they were offering. In this case different meant more familiar. The company’s vaccine uses biotechnology similar to the flu vaccine offered on an annual basis.

The hope is that if you were reluctant to get an mRNA vaccine, you could get the Novavax vaccine. But the company’s vaccine was not part of the Warp Speed ​​operation and therefore had to wait for regulatory approval.

Focus on boosters

Despite all the back and forth debate about vaccines, about 80% of the United States is fully vaccinated. The question that arises is whether people will have to undergo annual or more frequent Covid-19 booster vaccinations. Again, I’m not going to dwell on this (talk to your doctor please). But it seems logical that not all of the 80% currently vaccinated and possibly boosted will continue to do so.

And even if such a market exists, Novavax is still waiting for its vaccine to be approved for use as a booster injection. It’s a shame for Novavax because the company offers a real alternative to mRNA vaccines, but the company didn’t receive FDA approval in the United States until July 2022.

The bottom line for me is that NVAX stock is a risky stock at a time when investors who remain in stocks are turning to risky assets. With the likelihood of the share price moving lower, speculative investors may be able to try again at a discounted price.

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