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Shares of COVID-19 vaccine developers slumped this year as the pandemic’s impact waned and fears over a potential need for annual immunizations eased. Novavax (NASDAQ:NVAX), the biotech behind the Nuvaxovid COVID-19 shot, was no exception.
2023 stock performance
Following an over 26-fold rise in 2020, the shares of the Gaithersburg, Maryland-based biotech continued a two-year selloff, losing ~50% in 2023 as investors found better opportunities elsewhere amid a sharp drop in demand for its protein-based vaccine.
Most recently, Novavax (NVAX) hit a 52-week low last week, taking its QTD decline to ~32%, while its biotech peers, as represented by the equally-weighted SPDR S&P Biotech ETF (XBI), rose ~13% during the period.
With no product other than Nuvaxovid in its portfolio, NVAX has lost more than 86% over the past five years, while SPDR S&P Biotech ETF (XBI) added more than 30%.
What do Quantitative Measures say
Novavax (NVAX) is a Hold according to Seeking Alpha’s Quant Rating System, as concerns about the stock’s Momentum and Estimate Revisions, respectively, denoted by A and B grades, offset the attractive A and B grades it has received for Valuation and Profitability.
What does Wall Street say
Interestingly, favorable ratings on NVAX dominate Wall Street, with three analysts out of six indicating Buy recommendations on the stock. That includes two Strong Buy recommendations and Hold or Sell ratings from the other three.
What do SA analysts say
Novavax (NVAX) is a Sell for SA analysts, including Stephen Ayers, who issued a Strong Sell on the stock this week, citing significant hurdles the company has to face in 2024. “Investors must note the high risk of Novavax struggling to survive the next year,” Ayers wrote.
SA author Sapphire Wealth Insights disagrees. The analyst issued a Buy rating on the stock in September, counting on a potential short squeeze that could NVAX’s fortunes following the FDA approval of the company’s redesigned COVID-19 vaccine.
Latest earnings
With its Q3 2023 financials, NVAX beat analysts’ estimates for both the top and bottom lines, thanks mainly to ~$165M in grants it received from the U.S. government. However, its total product sales dropped to $2.2M, leading to a ~75% YoY decline in revenue.
Earnings predictions
Novavax (NVAX) projects COVID-19 vaccine uptake in the U.S. could reach 30M–50M doses during the 2023–2024 season. However, Wall Street estimates its full-year revenue could fall ~49% YoY to ~$1.0B, and its loss per share could drop ~51% YoY to -$4.10 amid an ongoing cost reduction initiative.
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