Novavax (NASDAQ: NVAX) has seen its stock price drop significantly from its peak level of $320 in February 2021 to $13 per share currently. Despite a surge in NVAX stock following a licensing deal with Sanofi, the company has suffered a sharp decline of 90% over the past three years. In comparison, the S&P 500 has seen a 40% increase during the same period. However, individual stocks, including those in the Health Care sector and even megacap stars, have struggled to consistently outperform the S&P 500 in recent years, while the Trefis High Quality Portfolio has managed to do so.
The recent economic environment, characterized by high oil prices and elevated interest rates, raises questions about NVAX’s future performance. Analysts estimate a 35% upside for NVAX stock from its current price of $13, with potential for further gains from royalties that Sanofi is expected to pay for Novavax’s vaccines. The company’s cash cushion should allow it to focus on in-house development of new products, which could further boost its stock price. Despite uncertainties, the market sentiments are expected to improve as the Federal Reserve aims to prevent a recession.
The inflation shock that began in 2022 has impacted the global economy, with the S&P 500 experiencing significant fluctuations. While the Fed has responded by raising interest rates aggressively, resulting in market recoveries followed by declines, recent stability has been achieved with hopes for rate cuts in 2024. Comparisons to the 2007-08 financial crisis show differences in how NVAX stock and the broader market performed, indicating potential opportunities for growth in the current economic climate.
Novavax’s revenue has shown significant growth, driven by its Covid-19 vaccine, with plans for a Covid-influenza combination vaccine in development. Despite losses per share, the company’s recent deal with Sanofi and its decreasing debt position should help improve its financial standing. However, concerns remain about its ability to meet near-term obligations due to negative cash flows from operations.
In conclusion, as market sentiments improve and fears of a recession diminish, NVAX stock has the potential for further gains fueled by the recent Sanofi deal. While it may not reach its previous high levels in the near future, the company’s fundamentals and partnerships suggest a promising outlook. Investors are advised to consider the performance of Novavax’s peers and utilize tools like Peer Comparisons to make informed decisions about their investments.
