Is It a Good Time to Invest in Nvax Stock, Given Its Huge Sales Beat Despite Unexpected Losses?

Nvax Stock

The original Novavax (NVAX stock) Covid vaccine is now approved for use in the United States on children as young as 12. The Novavax booster shot is also available to adults who have not previously received another one. Approximately half of all adults in the United States were qualified to receive it at the time this booster was made available.

The protein-based method is distinct from messenger RNA vaccines, such as those produced by Pfizer (PFE) and Moderna, which are widely utilized (mRNA). However, for it to work, an adjuvant, which is a chemical that enhances the immune response, must be acquired from Chile. Therefore, the production process can present specific difficulties.

Novavax also recently downgraded its estimate for the year 2022. The company anticipates that its sales for the year will fall in the middle of its previous guidance range of $2.0 billion to $2.3 billion. The company had previously projected that this year’s sales would range from $4 billion to $5 billion.

NVAX stock has been on a downward trend since reaching its high point in tandem with the biotech market in February 2021. When officials in the United States approved the principal Novavax vaccination for adults in July, the stock price received a temporary boost. However, following the event, they suffered another defeat.

The drop is a response to falling demand for vaccinations against Covid. In this regard, Novavax is not alone. According to the Centers for Disease Control and Prevention, around 74% of people aged five and older have had all necessary vaccinations to protect them against Covid. However, approximately 11% of persons in the same age group have received an updated booster shot from Pfizer or Moderna. These companies make the shot.

Is it a good time to buy NVAX stock today?

An in-depth analysis of the NVAX stock fundamentals

When compared to the criteria established by CAN SLIM for successfully trading growth companies, Novavax falls short.

The company has been suffering annual losses for some time now, a tendency that carried over into the previous year. The loss per share for Novavax in 2021 was $23.44, which significantly widened from the loss per share of $7.27 in 2020 and missed forecasts. Analysts forecast that Novavax will post a loss of $7.04 per share this year.

It is crucial to highlight that losses are expected for new commercial biotech businesses, which often invest in research and development. Although this is not desirable from the point of view of CAN SLIM, it is essential to remember that losses are expected.

The revenue for the prior year came in at about $1.15 billion, which was lower than the $1.26 billion that was anticipated. Still, revenue rose 141%. The analysts covering NVAX stocks anticipate the company will bring in $1.94 billion in sales this year.

During the company’s third quarter, Novavax unexpectedly incurred a loss of $2.15 per share and reported revenue of $735 million. The consensus estimate among market experts was for a gain of $1.57 per share. However, revenues came in far higher than the expected $586.2 million. The loss decreased from $4.31 per share in the same period last year to its current level. The number of sales increased by more than 400%.

For the year’s final three months, market analysts forecast losses of $1.10 per share and sales of $375 million. In comparison, earnings would improve from a loss of $11.18 per share in the same period the previous year. There would be a roughly 69% increase in sales.

Astute investors should search for businesses that have recently shown quarterly revenue and earnings growth of at least 20–25 percent. The earnings of Novavax have been volatile, with a rise in the first quarter followed by losses in the second and third quarters. Stocks with a track record similar to that of Novavax are considered speculative for growth investors because they represent a higher level of risk. In addition, recent forecasts provided by analysts for the entire year have been revised downward.

Novavax’s Covid Vaccine

The Novavax Covid shot is now available for purchase in the United States. Many countries utilize the vaccine, and the World Health Organization has classified it as an essential medicine for emergency situations.

The Food and Drug Administration (FDA) warned about the potential for recipients of the Novavax shot to develop myocarditis and pericarditis. The Pfizer and the Moderna vaccines should be used with the same caution.

The majority of these cases of cardiac inflammation have been found in younger males, specifically boys and young men. In the study that Novavax conducted, there were seven cases: six happened in vaccine recipients and one in the placebo group. Five of those six occurrences were found in males. Four of them were people who were under the age of thirty.

The vaccination successfully avoided mild, moderate, or severe cases of Covid around 90% of the time overall. Its preventive efficacy was around 78 percent in persons aged 65 and older. Pain or discomfort at the injection site was a common adverse effect, along with weariness, headache, muscle pain, joint pain, nausea and vomiting, and fever.

The Composite Rating for NVAX stock is 24 out of a possible 99 points, below average. The Composite Rating assigns a value between one and ninety-nine points to each stock’s fundamental and technical growth measures. According to this metric, the NVAX stock is ranked above 24 percent of all other equities.

The EPS Rating for the stock is likewise relatively low, coming in at 33. The earnings per share (EPS) rating is a measure of a company’s profitability, and according to that metric, NVAX stock is performing poorly. (If you want additional information on stock ratings, keep an eye on IBD Digital.)

Mutual funds hold a significant portion of the biotech stock. By the end of September, 437 funds owned 29% of the stock in Novavax. The support of several institutions is a positive indicator.

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About the author: Valerie Ablang is a freelance writer with a background in scientific research and an interest in stock market analysis. She previously worked as an article writer for various industrial niches. Aside from being a writer, she is also a professional chemist, wife, and mother to her son. She loves to spend her free time watching movies and learning creative design.