Excuse me while I type this story with one hand while I use the other one to pump my fist. Every day seems to bring another round of great news on the novel coronavirus vaccine front and if you’re rooting for Novavax Inc. (NASDAQ:NVAX) you may well wonder: Will NVAX stock catch a tailwind or something even better?
Yes Pfizer (NYSE:PFE) and BioNTech (NASDAQ:BNTX) made history. Their Covid-19 vaccine was first in the world to win approval. But it definitely won’t be the last, as our pandemic-battered planet will need every dose it can get. From the perspectives of medical science and investment, there is no such thing here as a too-crowded table.
NVAX stock has meanwhile enjoyed a year for the record books. Just the hope of a vaccine was enough to send some otherwise humble biopharmas through the stratosphere. As for Novavax, it’s up 2,500% in 2020. You don’t have to be a rocket scientist, medical scientist or investment scientist to get the picture: The prospect of a vaccine in hand can give investors a huge shot in the arm.
NVAX Stock and Pandemic Speculation
Some companies similar in size to Novavax leveraged vaccine enthusiasm in dubious and even shady ways. Here, Inovio (NASDAQ:INO) comes to mind. Their Covid-19 vaccine candidate, well, isn’t quite ready yet. And at some point they will bring some kind of vaccine or product or placebo to market. Lord knows, the medical industry has waited for 41 years. By now they’ll settle for a coconut frosted cupcake, with or without sprinkles. And yet, INO stock is up 244% for the year, meaning it has far outperformed big pharmas in the vaccine hunt such as Johnson & Johnson (NYSE:JNJ).
If you hold NVAX stock, then fortunately you’re in much more ethical hands. Given the flurry of recent vaccine announcements, it’s entirely possible the company could end the year with some spectacular reveal coming out of its Phase 3 trials. The trouble is, it’s been pretty quiet these last few weeks at the Novavax headquarters in Gaithersburg, Maryland. No announcements, No hinting. But hey, this is such a small company (less than 400 employees worldwide) that the head lab technician probably does all the PR and pinch hits as janitor.
Still, you can feel the Street getting jittery. Since Nov. 30, NVAX stock shed more than 17% of its value. Is this a sign of something? Well yeah, that the speculators and quick-kill artists are throwing temper tantrums. From a vaccine standpoint, though, it means bupkis. Novavax has substance to show for its efforts and unless it decides to quit with the finish line in sight, they will in all likelihood become a vaccine victor at some point in 2021.
The Analysts Have It Right
Just because you and me and the entire population of Planet Earth wants its Covid-19 vaccine NOW doesn’t mean we need to treat NVAX stock with equal impatience. I want to remind all the gadflies who’ve fled in search of something sexier that the analyst consensus target price remains high, at $186.20. No, that’s not 2,500%-land. But it is 62% higher than where Novavax trades today.
Four of six analysts, meanwhile, call NVAX stock a buy. From where I sit, they’re spot on. Consider that in the first quarter of 2021, they expect the company to report a profit of $3.89 per share. I mean, wow. What do they know that we don’t?
The answer is, perhaps not all that much. If you need a sporting metaphor to see you back to sanity and safety, keep in mind that Phase 3 in a vaccine trial is like the middle of the eighth inning. The end is in sight, which is a lot different than succumbing to short sightedness (the current investor pullback) or hindsight (back to Aug. 10, when NVAX stock hit $178.51).
Now This Is News
Maybe you’d be better off looking Down Under, mate. Headlines were made on Dec. 10 when Australia canceled an order for 51 million doses of a Covid-19 vaccine being developed by CSL Ltd. (OTCMKTS:CSLLY) after it ran into trial difficulties.
Now, click this link and read the second paragraph of the Bloomberg story. It mentions, almost in passing, how the Australian government is compensating for the CSL vaccine fail by ordering “11 million more Novavax doses.” I’ll repeat that: 11 million more Novavax doses. Now I’ll interpret it: The Australian government isn’t about to react to one miscue by setting itself up for another. They have placed a big bet on Novavax themselves.
Aren’t you glad that I can pick out little ol’ newsy nuggets like that? Years of practice as a copy editor, friend.
So the next time you hear some cable show portfolio pundit bellow and moan about “Is this the end for NVAX stock?” send them packing for Australia. Oh, and ask them to put in your order (and mine) for some Novavax shares on the way out. G’day!
On the date of publication, Lou Carlozo held long positions in PFE, BNTX and MRNA.