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Investors Should Not Lose Faith in NVAX Stock

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Novavax’s (NASDAQ:NVAX) Covid-19 shot is reportedly progressing towards an emergency use approval (EUA). The company is also making significant progress on other fronts, so I remain very bullish on NVAX stock.

Novavax (NVAX) vaccine for prevention of coronavirus, Covid-19, Sars-Cov-2 in doctors hands in rubber blue gloves

Source: Vladimka production / Shutterstock.com

Also importantly, the valuation of NVAX stock is still very attractive. Finally, although fears of the coronavirus have dropped sharply, I still expect meaningful demand for Novavax’s shot from governments and consumers going forward.

On March 6, The Wall Street Journal reported that Novavax’s jab for the coronavirus “is moving toward U.S. authorization” after the company proved the effectiveness of its manufacturing process to the Food and Drug Administration (FDA). According to the Journal, an EUA for Novavax’s shot is not “imminent.”

Reading between the lines of the article, I believe it’s implying that because the main obstacle to an EUA has been overcome, Novavax will likely receive the authorization soon. As a result, I expect the EUA to be granted by the end of the second quarter at the latest.

Continued Progress for NVAX Stock

Novavax announced on Feb. 23 that it has begun shipping its shot to European Union (EU) nations. According to Reuters, the shots were initially sent to “France, Austria and Germany,” followed by other EU countries.

Meanwhile, as of mid-February, Novavax’s shot has become available in Australia. Also in mid-February, Canada approved Novavax’s shot for adults.

Additionally, Novavax provided encouraging 2022 revenue guidance of $4.38 billion. Since the current market capitalization of NVAX stock is slightly below $6 billion, the stock’s valuation is quite attractive at this point. Moreover, according to Seeking Alpha contributor JR Research, the guidance might not include much revenue from the U.S.

Demand Likely to Be Strong for Its Covid Shot

As I’ve predicted for many months, many people’s worries about the coronavirus has decreased. However, I believe that the demand for vaccines among governments and some members of the public will remain strong.

Governments will want to continue to buy vaccines — at least for high-risk members of the public — because doing so is much cheaper for them than treating Covid-19 victims in hospitals. And vulnerable people, including many individuals over the age of 60 and those with multiple comorbidities, will certainly want to receive coronavirus vaccines.

Finally, while an Associated Press-NORC Center study showed fewer people are worried about Covid-19, 24% of those surveyed were “extremely” or “very” worried about the virus. I think many others who remain nervous about it and its potential long-term impact will want to continue receiving vaccines.

Also, encouragingly for vaccine demand in general and for Novavax in particular, the World Health Organization (WHO) reversed its stance and recommended people receive a booster shot. That leaves the door open for Novavax’s jab to eventually be used as a second booster shot for tens of millions of vulnerable individuals.

Novavax has continued to make significant progress in many areas. Further, its 2022 guidance and valuation are quite attractive. As a result of these points, I recommend investors buy NVAX stock.

On the date of publication, Larry Ramer held a long position in NVAX stock. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Larry Ramer has conducted research and written articles on U.S. stocks for 15 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Larry began writing columns for InvestorPlace in 2015. Among his highly successful, contrarian picks have been GE, solar stocks, and Snap. You can reach him on StockTwits at @larryramer.

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