Investors had high hopes for Novavax (NASDAQ:NVAX) but the company hasn’t had a good quarter. NVAX stock is down 25% in the past six months and more than 25% in the last month. The stock was trading at $226 on Sept. 20 and rose to $257 three days later. It’s been downhill since then. I believe the stock will continue to show volatility over the near term but the dip is a chance to buy.
Novavax is waiting for approval for a coronavirus vaccine and the persistent delays in filing for an FDA approval has disappointed investors. It is reasonable for investors to consider if it is worth their money or not. I think the company has strong potential and it is not limited to a Covid vaccine.
Let us take a look at what to expect from the stock in the near term.
EUA Would Be NVAX Stock Game Changer
Novavax is ready to apply for Emergency Use Authorization for its COVID-19 vaccine. It has already suffered through months of delays due to the issues in a manufacturing facility and the company is expected to submit an application this quarter.
If all goes well, the approval should soon follow and it will result in high sales and revenue for the company. The FDA approval would take the stock to new highs as Novavax will report impressive revenue numbers.
We cannot say that the pandemic has ended and neither has the demand for vaccines. Countries are still looking to buy vaccines and Novavax has ample time and opportunity to meet the growing demands. The demand for booster shots is also rising as countries have started administering them.
An approval will change everything for the company and regardless of how it prices the vaccines, there will be an impact on the bottom line. The company will see sales and income unlike anything in the past and it is one reason to hold on to NVAX stock.
There Is More Than The COVID-19 Vaccine
Novavax is not just about the Covid vaccine. It has a number of promising candidates in the pipeline. One is NanoFlu, its combination vaccine for coronavirus and influenza, which has achieved all the primary Phase 3 endpoints. A roster of experts are of the opinion that the coronavirus will soon be treated like flu and we may need a vaccine for it each year. If this turns out to be true, Novavax will have massive demand to cater to.
Further, the company has a vaccine for infants via maternal immunization, ResVax which is in Phase 3 trials. Respiratory syncytial virus (RSV) is a major cause of hospitalization in infants and lower respiratory tract infections. There are about 18 million children in the U.S. between the age of 6 months and 5 years. This vaccine, if approved, cold make a huge difference to the rate of hospitalization for infants.
Although the company is currently focusing on the Covid vaccine, booster shots and NanoFlu, there is a lot more it can offer. Do not simply pick the stock with only the Covid vaccine in mind. It will certainly push the share price higher after the FDA approval but Novavax is a one-trick pony.
Bottom Line On NVAX Stock
Novavax is already generating high revenue from the advance purchase agreements. If the FDA approval comes in this quarter, the company will report stellar results in the next quarter. However, unless investors see approval or sales figures, they are likely to downplay NVAX stock.
But it is a good reason to buy the stock at the current level as the near-term catalysts could change its growth story.
The company reports third-quarter results on Nov. 4.
On the date of publication, Vandita Jadeja 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.
Vandita Jadeja is a CPA and a freelance financial copywriter who loves to read and write about stocks. She believes in buying and holding for long-term gains. Her knowledge of words and numbers helps her write clear stock analysis.