Why Is Novavax (NVAX) Stock Falling Today?

  • Novavax (NVAX) is dropping after a negative analyst report.
  • The company finished third in the race for a Covid-19 vaccine.
  • Investors should have seen this coming.
NVAX stock - Why Is Novavax (NVAX) Stock Falling Today?

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Novavax (NASDAQ:NVAX) stock fell 6% on Sept. 21, and kept falling overnight, after a JP Morgan Chase analyst cut his price target from over $100/share down to just $27 with an “underperform” rating.

Eric Joseph said the action came after he revised the bank’s outlook for Novavax’s Covid-19 vaccine, called Nuvaxovid.

Shares trading at nearly $27.40 early on Sept. 21 were now trading at a little over $24 early on Sept. 22. Novavax’s market capitalization is now a little under $2 billion, and is down 90% on the year.

What Happened?

Novavax was a 2020 Covid-19 star on hopes for its vaccine, as developed with money from the Gates Foundation and the U.S. government. The company said then that its Matrix-M adjuvant would let it quickly ramp up production on a vaccine that wouldn’t require special handling.

But Novavax finished third in the vaccine race to MRNA-based solutions from Pfizer (NYSE:PFE), which got its technology from BionTech SE (NASDAQ:BNTX) of Germany, and Moderna (NASDAQ:MRNA). By this past April, I was calling the stock’s party over. At that time the stock was trading at $62 but most analysts, like the one from JP Morgan, still rated it highly.

Novavax has other vaccines in its pipeline, including one for the seasonal flu. But it has been unable to win approval in the past and lacks orders. Analysts now call it a risk-on stock in a risk-off market. Only six even tell Tipranks they follow it now and all their forecasts look dated.

NVAX Stock: What Happens Now

Before the Covid-19 pandemic began, Novavax was a $5/share stock. It could be headed there again.

The company ended June with about $1.4 billion in the bank, but operating cash flow has been negative for four straight quarters, which seems unlikely to change.  It needs to conserve that cash and win approval for its flu vaccine.

On the date of publication, Dana Blankenhorn held a long position in MRNA. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Dana Blankenhorn has been a financial and technology journalist since 1978. He is the author of Technology’s Big Bang: Yesterday, Today and Tomorrow with Moore’s Law, available at the Amazon Kindle store. Tweet him at @danablankenhorn, connect with him on Mastodon or subscribe to his Substack.

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