If Novavax (NASDAQ:NVAX) stock investors are looking for a shot in the arm, they’re going to be disappointed. Even Novavax’s management expressed doubts regarding the company’s ability to continue long term. Like it or not, the evidence overwhelmingly suggests that it’s not a wise move to take a share position in Novavax.
Let’s face it. Covid-19 vaccine stocks were red hot three years ago, but that’s old news in 2023. Besides, other Covid-19 vaccine manufacturers got a huge head start, and Novavax just never caught up.
Novavax’s loyal shareholders might hope for a full recovery if they’re underwater on their investment. However, sometimes the best policy is simply to drop your toxic stocks and focus on assets with better future prospects.
What’s Happening With NVAX Stock?
It’s hard to be the bearer of bad news. Yet, we have to honest and face the facts: NVAX stock has cratered from $290 to less than $10 per share. This is what can happen when a company is the target of massive hype but then falls by the wayside.
Remember, Novavax focuses primarily on Covid-19 vaccines. Look through the company’s investor presentation, and you’ll see that Covid-19 vaccines continue to dominate Novavax’s business operations.
That’s problematic in 2023, as developed nations are now focused on different problems than they were in 2020. Novavax was a celebrity on Wall Street for a very brief period, and that’s only because the company benefited financially from the pandemic.
Successful investors focus on future trends; they’re not busy looking in the rear-view mirror. Ask yourself: Does Novavax really represent the future?
Doubts About the Company’s Survival
The facts may be painful to look at, but they’r undeniable. Novavax has missed analysts’ consensus earnings per share estimates for the past seven reported quarters. That’s a poor track record.
Novavax’s sales haven’t been stellar, either. The company generated revenue of $357 million during 2022’s fourth quarter, missing Wall Street’s estimate of $383 million. That’s not even the worst part, though.
Here’s a bombshell statement from Novavax’s management: “Given these uncertainties, substantial doubt exists regarding our ability to continue as a going concern through one year from the date that these financial statements are issued.”
The “uncertainties” concern Novavax’s cash flow forecast and other financial issues. In any case, let’s not ignore the magnitude of those two terrible words “going concern,” which Novavax combined with two other ominous words: “substantial doubt.” Companies don’t use this kind of language if they’re in good fiscal condition, do they?
What You Can Do Now
We can offer sympathy but little hope to Novavax’s downtrodden investors. Perhaps there’s a lesson here about what can happen when people during a hype phase.
Novavax is practically a relic of a different time – only three years ago, but the world is very different today. Given the warning that came from Novavax’s own management, there’s no need to consider NVAX stock as it’s likely to continue losing value.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.