The last time I wrote about Novavax (NASDAQ:NVAX), in late January, I somewhat facetiously said that the only way NVAX stock had a shot at getting back over $200 a share was if investors were shown a photograph of U.S. citizens lining up to get Nuvaxovid, the company’s COVID-19 vaccine candidate.
While I didn’t come out and say NVAX stock was an outright “sell,” I did ridicule the way the company has told its story over the past two years and said investors are the ones paying the price for management’s lack of clarity. In other words, I was clearly bearish on NVAX stock.
However, I also mentioned in that article that “if I say Novavax stock is going higher, you should short it, and if I say it’s going lower, you should buy.” Because NVAX stock always seems to do the opposite of what I expect it will.
True to form, since my Jan. 24 article was published, NVAX stock is up about 8%. Go figure. But given recent news, I’d expect shares to have rallied much more than that.
On Feb. 10, Novavax delivered late-stage trial results that showed its two-dose vaccine is 80% effective against Covid-19 in teens aged 12 to 17. Yet, NVAX stock closed up less than 3% the next day.
Today, shares are up around 10%, presumably due to survey results showing that 73% of Americans would like the option of having COVID-19 vaccines that are based on more traditional vaccine technology — like Novavax’s vaccine is — versus messenger RNA and DNA technologies.
Should Investors Buy NVAX Stock on the News?
I’m the wrong guy to ask. Novavax has perplexed me more than almost any other stock I’ve covered over the past decade. When I think it’s going to zig, it zags, and vice versa. I gave up predicting the direction of its share price a long time ago.
What I do know is that investors have been beaten into a state of disbelief when it comes to Novavax. The company has failed to deliver on so many promises on so many occasions that it’s perfectly normal for anyone to be skeptical.
A recent Reuters article detailed how Novavax is underdelivering on its COVID-19 vaccine promises of producing and shipping 2 billion doses of its shot worldwide.
Novavax said it has completed delivery of around 10 million vaccine doses to Indonesia and that shipments of several million shots arrived in Australia and New Zealand on Monday. The company declined to comment on the exact number of deliveries it has made but said it is moving as quickly as possible to ship its contracted supplies for this quarter.
That’s painful to read, especially if you bought NVAX stock above $200 a share last year. I get the hesitancy to reveal competitive information, but it makes sense to grab on to a lifeline when you’re drowning. Specific data related to shipments is that lifeline.
The Reuters article states that even though India says the Serum Institute of India has shipped 10 million doses to Indonesia, an official there says more like 200,000 doses have made it to the country. That’s a significant difference.
And of the 1.1 billion doses Novavax has promised to the global vaccine distribution program COVAX, the company told Reuters it expects to deliver around 80 million doses in the first quarter of this year, or around 7%.
Novavax Can’t Get Out Of Its Own Way
I don’t think there’s any question that Covid-19 will have a permanent place in our lives moving forward. This means vaccines will likely be required on an ongoing basis.
Novavax has plenty of buyers for its vaccine despite all the problems and delays. Yet, at some point, even the countries most desperate for vaccines will figure out that Novavax has an abysmal execution level. As a result, they’ll turn elsewhere.
Like I said in my previous article, even when it’s got good news, Novavax somehow fails to translate that into investor enthusiasm. If any other company trotted out that its vaccine is 80% effective among teens, investors would be jumping over each other to buy shares.
But not with Novavax. Nope, the smart money’s going to wait to see if this is just another missed opportunity because of ineptitude and failure to be candid with investors.
The Bottom Line on NVAX Stock
It’s appropriate that the Super Bowl happened this past weekend. I doubt the running backs on either team fumbled nearly as much as CEO Stanley Erck and his management team. They’ve been an abject failure.
I’m surprised there haven’t been any activist investors circling the company given the amount of distrust that exists between Novavax and the Street.
I’m not a big fan of investor activism, but in this case, I think a big fish taking a two-by-four to Novavax’s management team and board might do the trick for this ailing stock.
So, should you buy NVAX stock on the recent news? Ask your neighbor. I’m done with it.
On the date of publication, Will Ashworth 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.
Will Ashworth has written about investments full-time since 2008. Publications where he’s appeared include InvestorPlace, The Motley Fool Canada, Investopedia, Kiplinger, and several others in both the U.S. and Canada. He particularly enjoys creating model portfolios that stand the test of time. He lives in Halifax, Nova Scotia.
