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Msg  113540 of 203135  at  2/20/2021 9:29:54 PM  by

emichemich

The following message was updated on 2/20/2021 9:33:21 PM.

IBD analysis NVAX

 
In all of 2020, Novavax (NVAX) shares skyrocketed north of 2,700%. On a year-to-date basis, Novavax stock had tacked on almost 152% growth as of midday Feb. 19. That came after the company inked a deal to supply a global initiative with 1.1 billion doses of its coronavirus vaccine.
Earlier in the month, Novavax expanded a collaboration and licensing agreement with SK Bioscience for 40 million doses of its coronavirus vaccine for South Korea. The company also submitted a rolling review for its vaccine in the U.S. and other countries.
That also followed a surge of nearly 65% on Jan. 29 after the company said its coronavirus vaccine was 89.3% effective in a Phase 3 test. Also bullish, the experimental drug was 95.6% effective at blocking the original strain and 85.6% effective against the mutated U.K. strain. It was also 60% effective in preventing Covid-19 resulting from the South Africa variant.
That puts Novavax's vaccine up there with already authorized drugs from Pfizer (PFE) with its partner BioNTech (BNTX) and Moderna (MRNA). Novavax's drug also outperformed experimental vaccines from Johnson & Johnson (JNJ) and AstraZeneca (AZN).
Coronavirus vaccines could offer huge revenue potential for the companies that succeed in their development. Analysts say it will take a number of successful vaccines to span the globe. So, is NVAX stock a buy right now?
Fundamental Analysis Of NVAX Stock
It's helpful to examine stocks using CAN SLIM guidelines for successfully trading growth stocks. And, where it matters from a fundamental basis, Novavax stock doesn't measure up to par.
Novavax has reported years of annual losses. From 2011-16, those losses accelerated markedly. This is common for pre-commercial biotech companies — which are typically investing in research and development — but it's not desirable from a CAN SLIM perspective.
In 2017, annual losses per share began narrowing. For 2020, analysts polled by FactSet call for Novavax to lose $5.44 per share.
In 2021, analysts expect the biotech company to net some profits. Wall Street projects Novavax will earn $24.91 a share. The turnaround could come in the first quarter when analysts predict adjusted earnings of $3.53 per share on $513.1 million in sales.
Savvy investors should look for companies reporting recent quarterly revenue and earnings growth of at least 20%-25%. In the first quarter, Novavax earnings would swing from losses, and revenue would skyrocket upward of 15,000%. Stocks with such a record are more speculative and carry higher risks for investors.
Currently, Novavax revenue is entirely tied to development agreements. But that could soon change as the company seeks authorization for its highly effective coronavirus vaccine.
Novavax's Planned Coronavirus Vaccine
A coronavirus vaccine would be huge for Novavax.
It has also wrapped Phase 3 studies for vaccinations against respiratory syncytial virus, or RSV, and the seasonal flu.
Notably, NVAX stock has a Composite Rating of 60 out of a best-possible 99. The Composite Rating is a 1-99 measure of a stock's technical and fundamental growth metrics. On this measure, NVAX stock ranks below the top one-third of the pack.
Shares also have a poor EPS Rating of 16. The EPS Rating is a measure of profitability and, on that bar, NVAX stock is weak. (Keep tabs on IBD Digital for more on stock ratings.)
On Nov. 10, NVAX stock tumbled nearly 12% on its growing losses. Novavax reported adjusted a loss of $3.21 per share on $157 million in third-quarter revenue. Losses grew markedly. Revenue grew more than 6,000%, though from a paltry $2.5 million in the year-ago period.
Mutual funds hold a good chunk of the biotech stock. As of Dec. 31, 444 funds owned 22.28 million shares, or 35% of Novavax stock. Institutional support is a good sign.
What Does History Say About Novavax Stock?
Founded in 1987, Novavax's technology uses moth cells to develop molecules for vaccine development at a faster rate than the typical process, which relies on chicken eggs.
Government agencies have seen promise in that technology. But NVAX stock is plagued by some high-profile disappointments in clinical studies.
In 2011, the U.S. Department of Health and Human Services' Biomedical Advanced Research and Development Authority gave Novavax $179 million to develop a flu vaccine. Nine years later, that flu vaccine succeeded in the final-phase test. The next day, NVAX stock popped 4%.
But its RSV vaccine hasn't had the same luck. The biotech company received $89 million from the Bill & Melinda Gates Foundation in 2015 to develop an RSV vaccine. A year later, the vaccine didn't meet its primary or secondary goals in older adults and Novavax laid off nearly a third of its staff.
Novavax stock ended 2016 with a spectacular downfall. Shares plummeted 85% that year.
In 2019, the vaccine failed in pregnant women and Novavax announced a reverse stock split to avoid delisting from the Nasdaq. The biotech company also sold some manufacturing facilities to Catalent (CTLT) to raise $18 million in cash.
That year, NVAX stock plunged 89%.
Now, all eyes are on Novavax's efforts in Covid-19. The biotech company received $388 million from the Coalition for Epidemic Preparedness, a global alliance to stop epidemics. The Gates Foundation also gave it $15 million in July to develop a coronavirus vaccine.
Novavax won its biggest award in July: $1.6 billion from Operation Warp Speed, an effort by former President Donald Trump's administration to get a coronavirus vaccine approved and distributed by January.
Technical Analysis Of NVAX Stock
Coronavirus vaccine news has stoked Novavax stock. Shares have touched several record highs in February after the company said on Feb. 4 that it submitted rolling reviews of its vaccine in the U.S., U.K. Europe and Canada. It's seeking emergency authorizations for the drug.
That stock price gain is reflected in the biotech stock's perfect Relative Strength Rating of 99. The RS Rating pits all stocks, regardless of industry group, against one another in terms of 12-month price performance. On this measure, NVAX stock now ranks in the top 1%.
According to MarketSmith.com, Novavax stock surged above a buy point at 150.60 on Jan. 29. Shares topped their 50-day moving average in late November.
On Dec. 17, Novavax stock surged 9% after the company inked a supply deal with New Zealand for 10.7 million doses of its coronavirus vaccine. Further, the biotech company has a deal in place with Australia, and concluded exploratory talks with the European Commission for up to 200 million doses of the vaccine.
Novavax also announced it would expand its facilities to support the development of a vaccine against Covid-19. The company secured two additional properties near its Gaithersburg, Md., headquarters for additional lab and office space for manufacturing, research and business operations.
But Novavax stock was under pressure on Feb. 16 despite entering a collaboration and license agreement with SK Bioscience for 40 million doses of its Covid-19 vaccine in South Korea. Shares popped on Feb. 19 after the company signed a deal to supply COVAX with 1.1 billion doses of its coronavirus vaccine. COVAX is a global initiative to ensure equitable vaccine distribution.
So, Is NVAX Stock A Buy Right Now?
To make a long story short, no, NVAX stock isn't a buy right now. Investors are encouraged to buy a stock when it's no more than 5% above an entry. Even if it was in a buy zone, Novavax stock would be a speculative buy based on its shaky financial metrics. (Keep an eye on Stocks Near A Buy Zone.)
Novavax stock has a perfect RS Rating. But the biotech company has also reported years of losses and its sales aren't yet tied to a commercial product. All of this makes NVAX stock a speculative investment, assuming it enters a buy zone.
It will be important to watch Novavax's efforts to develop a coronavirus vaccine, especially as leaders Pfizer and Moderna have already hit the market.
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 Twitter at @IBD_AGatlin.
 


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113556 Re: IBD analysis NVAX buyandhomework 0 2/20/2021 9:59:20 PM
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