A Shot of NVAX Stock Is NOT What Your Portfolio Needs

  • Novavax’s (NVAX) CEO seemingly recognizes waning demand for Covid-19 vaccines in the U.S.
  • Novavax’s dismal fiscal data, along with a statement from President Biden, are problematic for Novavax.
  • Investors don’t need to weigh down their portfolios with fast-falling NVAX stock.
NVAX stock - A Shot of NVAX Stock Is NOT What Your Portfolio Needs

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Novavax (NASDAQ:NVAX) stock hasn’t had a great 2022, down 86% since the beginning of the year.

The company focuses on products to treat infectious diseases but is definitely best known for its Covid-19 vaccine NVX-CoV2373, also known as Nuvaxovid.

There are plenty of other competing vaccines in this category, and Novavax’s shots haven’t been strong sellers in the company’s home market. A recent statement from President Joseph Biden certainly won’t buoy Novavax’s already dismal financial stats.

Assigning Novavax a “D” rating might seem harsh, but investors should acknowledge the facts. NVX-CoV2373 isn’t the most commonly administered Covid-19 vaccine in the U.S. – not even close. This is problematic for a business that depends so heavily on its vaccine sales.

Furthermore, even the company’s management seems to acknowledge that its Covid-19 vaccine sales aren’t robust. Sorry to say it, but irrespective of the President’s stance on the pandemic, there’s no vaccine to protect against Novavax’s poor financial performance.

NVAX Novavax $20.06

What’s Happening with NVAX Stock?

While the stock market’s been under pressure in 2022, NVAX stock has been a particularly poor performer. The shares traded for $140+ at the beginning of the year, only to trade around $20 today.

Does this mean it’s time to go n a bottom-fishing expedition? Definitely not, as Novavax has persistent problems that won’t likely be resolved anytime soon.

Consider this: as of Sept. 17, nearly 225 million Americans received at least two Covid-19 vaccine doses. Of those, only 6,278 were vaccinated with Novavax’s shots.

This poor performance is bound to have a negative impact on Novavax’s next quarterly financial report. On that topic, Novavax’s most recently reported quarter showed deep cracks in the company’s foundation.

For one thing, Novavax posted $186 million in second-quarter 2022 revenue, a steep fall-off from the $298 million recorded in the year-earlier quarter. Also, Novavax’s quarterly net earnings loss of $510 million was discernibly worse than the year-earlier quarter’s $352 million loss.

The real kick to the gut, though, was Novavax’s forward sales guidance. Alarmingly, the company reduced its full-year 2022 sales projection from $4 billion to $5 billion, to just $2 billion and $2.3 billion.

Trouble from the Top

You’ve probably seen this in the headlines by now: Biden declared that the Covid-19 pandemic is “over.” It’s been the topic of debate in traditional and social media for a while now.

No matter how you might feel about Biden’s statement, it’s important to be objective as an investor. There’s no denying that the President’s assertion is unfavorable for NVAX stock.

Indeed, Novavax shares lost 9% of their value soon after Biden said the pandemic is over.

It’s yet another problem for a company that can’t afford to have any more problems.

According to the Wall Street Journal, Novavax CEO Stanley Erck observed an “unexpected shortfall in demand for Covid-19 vaccines,” while also acknowledging, “Demand is also uncertain in the U.S.”

It’s no wonder, then, that Novavax’s management felt compelled to cut its full-year sales guidance in half. It also shouldn’t be too surprising, then, that J.P. Morgan analysts downgraded NVAX stock from “neutral” to “underweight.” One of J.P. Morgan’s analysts, Eric Joseph, even sees “further guidance cuts … in the offing” for Novavax.

What You Can Do Now

Given Novavax’s subpar Covid-19 vaccine sales and pitiful profit potential, it’s difficult to give NVAX stock a positive rating. Moreover, even the company’s CEO felt compelled to acknowledge that Covid-19 vaccine demand in the U.S. is waning.

Ultimately, Biden’s statement about the pandemic being “over” is just one factor of many to consider. Still, it adds weight to an already compelling bearish argument, so it’s prudent to refrain from investing in Novavax now.

On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.

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