Why Novavax Stock Is Up By 6% Today

Novavax Stock Rallies After Company Gets Emergency Use Authorization For COVID-19 Vaccine In India

Shares of Novavax gained strong upside momentum after the company received an emergency use authorization for its coronavirus vaccine in India.

Novavax stock has been very volatile in recent months and traded in a wide range between the lows near $120, that were reached back in October, and the highs near $235, that were reached a week ago.

It should be noted that other vaccine stocks like Moderna and BioNTech have also experienced significant volatility. It looks that traders are concerned about sustainability of current revenue and profits.

New anti-viral drugs appeared in the market, and there are hopes that Omicron, which has already became the dominant variant in the U.S. according to CDC, may be less dangerous than Delta. In this environment, market sentiment shifts quickly, which is visible in the recent dynamics of Novavax stock.

What’s Next For Novavax Stock?

Analysts expect that Novavax will report a loss of $12.12 per share in the current year and a profit of $25.71 per share in the next year, so the stock is trading at less than 7 forward P/E.

As I mentioned above, the key problem for Novavax and other vaccine stocks is poor earnings visibility. In addition, earnings estimates for the next year have been steadily declining, which served as an additional bearish catalyst for Novavax stock.

While Novavax is cheaper than its peers, the discount is not dramatic, so it remains to be seen whether speculative traders will choose Novavax stock over the above-mentioned Moderna or BioNTech if they decide to bet on the rebound of the segment.

In recent weeks, we have seen some rush to safety, and bigger, diversified players like AstraZeneca and Pfizer had good stock price dynamics while shares of  non-diversified vaccine makers found themselves under pressure. If this trend continues, shares of Novavax will move lower despite good news from India.

For a look at all of today’s economic events, check out our economic calendar.