Novavax’s (NASDAQ:NVAX) Covid-19 vaccine candidate may still be far from entering the U.S. market. But that’s not a reason to skip out on NVAX stock. Why? While it’s not one of the front-runners, this company is still not out of the running domestically.
More specifically, its vaccine could still find success in the possible booster shot segment of the space. Plus, some of the unique products working their way through the company’s pipeline — like a combination Covid-19 and flu vaccine — could end up being winners as well.
However, these U.S.-focused catalysts may not even have to play out for NVAX stock to keep performing. Further news of overseas deals points to Novavax finding big commercial success with its candidate. After this year’s strong performance, there’s a path for shares to make another leap higher in 2022. All it needs to do is hit earnings projections in order for investors to give it a higher valuation.
So, coming off a recent pullback, now’s the time to seize opportunity with Novavax. Dive into this perceived “also ran” before it soars again.
Overseas Deals Are Keeping NVAX Stock a Winner
It may not be in the same position as Johnson & Johnson (NYSE:JNJ), Moderna (NASDAQ:MRNA) and Pfizer (NYSE:PFE) right now, but Novavax is more similar to these three front runners than it is to the rest of the pack. That’s because, although NVAX has yet to enter the U.S. Covid-19 vaccine market, it continues to lock down big deals abroad.
Most recently, this was seen with the company’s deal with Takeda Pharmaceutical (NYSE:TAK) in Japan. As InvestorPlace’s Samuel O’Brient reported on Sept. 7, the company is licensing its vaccine to Takeda, which will manufacture 150 million doses for the Japanese government. This deal is particularly promising in two ways.
First, the agreement further demonstrates how Novavax will not be held back by production and supply problems. Secondly, though, an order of this size could give the vaccine some much-needed social proof. That means that additional big-ticket orders from major countries across the world could follow.
Swimming in vaccine orders, this company appears set to deliver strong results in the coming year. But best of all? As I mentioned before, all the company really has to do to get NVAX stock moving higher is meet expectations.
A Clear Path Toward $500
Based on sell-side earnings projections of $32.30 per share in 2022, NVAX shares currently trade at a forward price-to-earnings (P/E) ratio of 7.25 times. Why so low? Well, unlike Moderna, 2021 has not been the year that Novavax gets to “cash the check.” That moment still hasn’t happened yet — and there’s some uncertainty as to whether or not it will.
However, this uncertainty also means opportunity. All the company needs to do is meet expectations. If it can do that, NVAX stock could more than double from its closing price of roughly $234 on Sept. 13. So, what makes me think it can near $500?
Given that it’s still unclear as to whether vaccine sales will be a one-and-done event, investors remain cautious when it comes to their valuations. For example, MRNA trades for around 14.2 times estimated 2021 earnings.
This current valuation gives us an idea of how the market will value Novavax once its “cash the check” moment happens. Multiply this company’s estimated earnings for next year by Moderna’s current multiple and what do you get? Around $460 per share.
Buy NVAX Stock Ahead of a Possible Surge
Novavax may not need its U.S.-focused catalysts to get to $500 per share, but they could give it a further boost as well.
Sure, the company may be too late to the game with its Emergency Use Authorization (EUA) application. However, the results of its booster study last month could signal that many will opt to “mix and match” when it comes to booster shots. Plus, Novavax’s hybrid vaccine could find success as well once it’s approved.
News of President Joe Biden’s vaccine mandate has resulted in NVAX stock pulling back as of this writing. Of course, the news primarily benefits vaccine makers who are already approved in the United States. But, given that Novavax is on track to deliver strong results on overseas sales? Buy this dip, ahead of shares possibly doubling from here in the coming year.
On the date of publication, Thomas Niel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Thomas Niel, contributor for InvestorPlace.com, has been writing single-stock analysis for web-based publications since 2016.