Novavax (NVAX), a rival to Pfizer (PFE) and Moderna (MRNA), remains volatile. After hitting a two-year high in June on enthusiasm for its updated Covid vaccine, Novavax stock has pulled back markedly.
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Promisingly, the Food and Drug Administration removed a clinical hold preventing the company from testing its Covid/influenza vaccine and standalone flu shot in people. Previously, the agency put testing on hold after one participant in a study outside the U.S. experienced motor neuropathy after receiving the combination vaccine in January 2023. The side effect was reported this September.
Novavax stock plummeted more than 19% on Oct. 16, the day the FDA put the studies on hold. But shares only inched forward about 1% on Nov. 11 after the agency removed the hold.
On Nov. 12, Novavax shares tumbled more than 6% after the company cut its full-year outlook despite beating third-quarter sales expectations.
The company is known for its protein-based vaccine technology, a rival to the newer messenger RNA platforms used by Pfizer and Moderna. Sanofi (SNY) is tapping into that technology. The pharma giant inked a deal with Novavax worth up to $1.2 billion. Novavax stock rocketed by triple digits on May 10, the day the deal was announced.
As Pfizer and Moderna continue to struggle, is Novavax stock a buy or a sell in December 2024?
Novavax Showcases Promising News
Recent news has looked promising for the biotech company.
The FDA removed the clinical hold barring Novavax from testing the Covid/influenza vaccine and standalone flu shot in people. Novavax also won authorization in the U.S. and Europe for its updated Covid vaccine in people age 12 and older.
The company also said it ended the third quarter with more than $1 billion in cash and receivables.
Novavax is also looking ahead to a potential approval date for its original Covid shot, scheduled for April. Novavax’s vaccine is available in the U.S. under an emergency use authorization.
There are pros and cons to the protein-based technology Novavax used to develop its shot, dubbed Nuvaxovid. The messenger RNA, or mRNA, vaccines are quicker to produce. But the protein tech could appeal to people who are uneasy with the newer mRNA platforms.
Novavax Expands Sanofi Partnership
Sanofi will co-commercialize Novavax’s current Covid vaccine worldwide, excluding some countries where there are existing advance purchase agreements and existing partnerships. Sanofi will also license Novavax’s Covid vaccine to be used in combination with its flu shot.
Novavax received an upfront payment of $500 million and up to $700 million in additional development, regulatory and launch milestones, plus tiered royalties on sales. Sanofi also took a small stake in Novavax stock.
Novavax Stock Has Strong RS Rating
Novavax stock has a middling EPS Rating of 60, reflected in its third-quarter loss of 76 cents per share. The company also reported $84.5 million in sales. Sales fell 55% year over year, but beat forecasts for $73.8 million. Losses were 2 cents per share steeper than expected, but narrowed vs. the year-ago period.
In the fourth quarter, analysts polled by FactSet expect an adjusted 51-cent loss per share. The Street also projects $102.7 million in sales, down 65% year over year.
The company also trimmed its sales outlook for the year to $650 million to $700 million. That’s down from its previous guidance for $700 million to $800 million.
The Composite Rating for Novavax stock is a middling 40 in December 2024 — reflecting its fundamental and technical strength. Meanwhile, Novavax stock’s Relative Strength Rating is a middle-of-the-road 63. The RS Rating pits a stock’s 12-month performance against all other stocks.
Novavax stock is also below its 50-day moving average and 200-day line, MarketSurge shows.
Is Novavax Stock A Buy Or A Sell In December 2024?
According to The IBD Methodology, of which risk management is one of four key pillars, Novavax stock isn’t a buy in December 2024. Shares were, in fact, a sell on Oct. 16 when they fell below their 50-day line in big volume following the FDA hold.
Of the analysts following Novavax stock on FactSet, three have buy ratings, one rates it a hold and one has a sell rating.
It will be important to keep an eye on the company’s efforts to expand its technology, which could come alongside the Sanofi deal. The firm is also working on flu and malaria shots.
But analysts don’t expect Novavax to become profitable until 2025. Sales are expected to drop for several years before returning to growth the following year. Savvy investors should consider stocks with at least 20% to 25% recent earnings and sales growth.
(Keep an eye on Stocks Near A Buy Zone.)
To find the best stocks to buy and watch, check out IBD Stock Lists. Make sure to also keep tabs on stocks to buy or sell.
Follow Allison Gatlin on X, the platform formerly known as Twitter, at @IBD_AGatlin.
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