Pharmaceutical companies have emerged as the top players in the pandemic. Novavax (NASDAQ:NVAX) stock is known for the company’s vaccine against Covid-19 and it has garnered a lot of attention for the emergency use approval.
NVAX stock saw a dip post Q2 earnings which gives a strong buying signal. Novavax is a lot more than the Covid vaccine and it has the potential to go much higher.
The stock was trading at $315 in February 2021 and had seen a major dip to $121 in May but has gained momentum and is trading close to $235 today. I had recommended a buy in May when the stock was trading at $128.
The stock has been up 50% over the past year and if you had purchased it on my recommendation, you could be sitting on 80% gains. I strongly believe it will continue to rise and has the potential to go higher than $300.
With that in mind, let’s dig deeper into the investment case of NVAX stock.
Emergency Use Approval In India
Investors have been waiting for the emergency use authorization of Novavax’s Covid-19 vaccine. The company had earlier announced that it will file for authorization in the third quarter, but it does not look possible at this stage.
However, all is not lost for the company. Novavax has enough potential outside the U.S. and it could continue to generate revenue through the same.
The EU is buying 200 million doses of the vaccine as new strains are spreading across the world. We have not won against the pandemic, several countries across the world are struggling to return to normalcy and the cases are constantly rising. This shows that countries will be keen on buying enough vaccines for their population.
Novavax could be approved in India without the emergency use authorization and India has a massive market and the vaccination rate is below 10%. The country will be willing to buy as many vaccines as possible and this will lead to a huge demand for the company.
In reality, nobody sees a complete end to Covid-19, and it will soon become like the flu which needs regular booster shots. Not many companies manufacture the vaccine and if you look at the massive market, it shows the true potential of Novavax.
Novavax Vaccine Has The Potential
Novavax certainly has the potential to become a huge vaccine manufacturer this year. Its vaccine has shown high efficacy in trials and can fight against the new virus strains. There is a limit to the number of vaccines that can be manufactured. The players are limited while the demand is growing.
Novavax is on track to achieve the monthly capacity of 100 million doses by the end of this quarter and 150 million monthly doses by the end of the fourth quarter. This will take its production and revenue numbers to a new high.
Countries are already ordering vaccines through 2023 to ensure that every citizen is vaccinated. It shows the massive market potential that Novavax enjoys. Even if there is not much uptake in the U.S., the company will have vaccine orders flowing in from different countries and it will contribute to sales and revenue.
The Bottom Line on NVAX Stock
There are many doubts surrounding the emergency use authorization of the vaccine. But there is a lot to look beyond the U.S. authorization. If Novavax manages to get an approval from India, the demand for its vaccine will rise. That will lead to high revenue generation.
NVAX stock has strong upside potential. The current dip is a great opportunity to add the stock to your portfolio.
I believe the stock will hit $300 soon.
On the date of publication, Vandita Jadeja did not have (either directly or indirectly) any positions in any of the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
