Novavax (NVAX) is a stock that doesn’t do things half-heartedly. Shares saw incredible growth during the Covid-era with the company’s attempts to bring a vaccine to market and usher an end to the pandemic lauded by investors. But the comedown has been as brutal as the highs were euphoric. Late to the vaccine approval party on account of continued delays, then impacted badly by missing sales targets, and finally annoying investors with a capital raise, the shares shed a horrendous 93% of their value last year.
For long time NVAX bull, B. Riley analyst Mayank Mamtani, 2022 amounted to a “worst-case scenario” for his investment thesis. However, despite noting that FY23 topline/cash flow expectations have now been “dramatically lowered,” the analyst still thinks there are better times ahead for Novavax.
Explaining his bullish stance, the analyst said, “We reaffirm our thesis of NVAX to be viewed as a value play as there remains substantial value in its core respiratory vaccine portfolio, constituting of (1) commercially available COVID-19 vaccine, NVXCoV2373 with regulatory authorizations as primary series (ages 12+) and heterologous boosting (ages 18+, restricted to first booster) in all major developed markets; and (2) combination COVID/ Flu vaccine (CIC) pipeline candidate progressing through Ph. II dose-confirming study.”
That said, it’s not all rosy, and while Mamtani sticks with a Buy rating the price target is slashed in half and lowered from $74 to $37. The two main factors behind the price target adjustment are the reduction of revenues recognized from active APAs and the inclusion of the recent capital infusion’s dilutionary effect, which resulted in shares outstanding rising from 84 million to 100 million “on a fully diluted basis.” Mamtani has also reduced U.S. and EU market share expectations.
Nevertheless, despite the severe cut, the new objective could still potentially yield returns of ~200% in the year ahead. (To watch Mamtani’s track record, click here)
Other analysts still have higher hopes; the Street’s average target clocks in at $65, implying gains of 490% could be in the cards over the following months. All in all, based on 3 Buys vs. 1 Sell, the stock claims a Moderate Buy consensus rating. (See Novavax stock forecast on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
