Novavax Stock May Not Be This Cheap For Long

The shares of vaccine manufacturers have been going through a tough time, and one of the hottest names – Novavax (NASDAQ:NVAX) stock – hasn’t had a smooth ride.

Concept of vaccine against COVID-19. Glass medical vials with liquid. Ampoules with coronavirus vaccine on a medical glass table
Source: vovidzha / Shutterstock.com

Novavax stock took a beating after the U.S. Supreme Court blocked the Biden administration’s vaccine mandate for companies that have more than 100 workers.

NVAX stock dipped more than 29% in the last week.

The stock was once trading at the highs of $330 and has been declining since February this year. The past month saw a dip of more than 55% and the stock went from $200 to $92.

However, Novavax stock continues to have potential. I think this dip is a good chance to own the stock as the failure of the federal mandate does not prevent states, colleges, private employers, and universities from imposing the requirements of their own.

The Supreme Court’s ruling may have led to a dip in all vaccine maker shares but I believe it is temporary. Novavax is set for solid revenue growth in 2022 and this makes the stock a buy.

 The Vaccine Market Is Still Developing

Novavax may have been late to the vaccine race, but it has not missed the opportunity yet. The vaccine market is huge and is constantly growing. There is no end in sight with the pandemic and this shows that the demand for vaccines will continue to remain.

Novavax has a large market by volume in India. Further, its vaccine is available in 170 countries and the demand for boosters has only just begun. The company could also see clearance in more countries over the next two months.

Even if Covid-19 becomes endemic, the demand for vaccines will continue to rise throughout 2022. We do not know what form the virus will take and whether there will be any new variants or not, but we do know that the best way to keep safe from the virus is through vaccinations. Many countries still have a very low vaccination rate while many are struggling to vaccinate the population  due to supply issues. This is where Novavax can make money.

It recently announced a regulatory submission with Serum Institute of India to the South African Health Products Regulatory Agency for emergency use authorization. If authorized, Novavax will have massive demand from the nation since it has a very low vaccination rate at present. Additionally, it just received approval from South Korea.

Novavax has an opportunity to make the most of the current pandemic situation and if it can meet the demand, it will be able to report solid revenue numbers. This could be a solid year 2022 for vaccine stocks and Novavax might be able to impress investors.

However, investors need to remain patient and wait for the emergency use authorization from the FDA. More approvals will mean more demand and higher revenue but one thing is certain, masks and vaccines will continue to dominate our lives in 2022.

The Bottom Line on NVAX Stock

In the first week of January, B. Riley Securities analyst Mayank Mamtani had a price target of $315 with a “buy” rating. The analyst believes that the current volatility is a chance to accumulate the shares. Mamtani believes Novavax could get a meaningful share of the expanding market and the emergency use authorization from the FDA come soon.

Out of the five analysts on TipRanks, four have a “buy” rating and one has a “hold” rating for NVAX stock with an average target price of $268.

It is important to keep in mind that Novavax is currently heavily dependent on the Covid vaccine and it will have to handle the volatility that comes with the news. Positive or negative news will affect NVAX stock, but 2022 revenues should take the stock higher.

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.


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