Novavax, Inc. (NVAX) has helped many people live healthier lives by developing vaccines and other treatments. The company has been working for more than a decade to improve public health around the world.
Novavax has tackled COVID-19, seasonal influenza, Ebola virus disease (EVD), Middle East Respiratory Syndrome Coronavirus (MERS), and Severe Acute Respiratory Syndrome (SARS).
Boasting cutting-edge vaccine technology, Novavax’s recombinant nanoparticle vaccines combine genetic engineering with traditional approaches. These solutions are customized against different pathogens that threaten human health. (See Novavax stock charts on TipRanks)
In the U.K. Phase 3 clinical trial of NVX-CoV2373 by Novavax, 96% of volunteers were protected against the original strain of COVID-19. The trial also showed 86% protection against the B1.1.7 (Alpha) variant strain, even among those aged 65 or older. This is important because the elderly are a high-risk group; impacted the most by disease complications from variants.
Valuation
Despite Novavax enjoying strong growth momentum and using cutting-edge technology to drive its vaccine innovation, the market is valuing the company quite reasonably. For example, it is only priced at 4.7x forward revenues, 11.6x forward earnings, and 21.6x forward free cash flow.
Revenues are expected to soar by 317% in 2021, and by another 177% in 2022. Earnings per share are expected to grow by 8.6% in 2021, and 515% in 2022.
Wall Street’s Take
From Wall Street analysts, Novavax earns a Strong Buy consensus rating based on 4 Buy recommendations in the past three months. Additionally, the average NVAX price target of $276.50 puts the upside potential at 20.6%.
Summary and Conclusions
Novavax is enjoying rapid revenue growth thanks to its innovative approach to vaccine development.
Furthermore, Wall Street analysts are overwhelmingly bullish on the stock. The current valuation looks very attractive relative to its growth prospects and competitive advantages. As a result, the stock looks like it could be a good buy at current levels.
Disclosure: On the date of publication, Samuel Smith had no position in any of the companies discussed in this article.
Disclaimer: The information contained herein is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities.
