Novavax has plunged amid falling demand for COVID vaccines. Is it time to buy?
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Shares of COVID-19 vaccine developer Novavax (NVAX) have been declining steadily since the beginning of the year, despite Wall Street analysts rating the stock a strong buy. With investors worried about waning demand for COVID protection, is now the time to buy?
What's Next as Pandemic Demand Wanes?
COVID vaccine makers skyrocketed in 2020 and early 2021. However, stiffening competition and market saturation in many countries have led to demand concerns over the past several months. 
Novavaxâs (NVAX) first product, a COVID-19 vaccine called NVX-CoV2373, has received either full, conditional or emergency authorization in several major markets, including India, UK, EU, Canada, Australia, South Korea, Japan, Indonesia, and the Philippines. Itâs also been greenlighted by the World Health Organization.
But the product is still under review by the FDA. So far, the only vaccine makers to win authorization in the US are Moderna (MRNA), Johnson & Johnson (JNJ), and Pfizer (PFE) with partner BioNTech (BNTX).
While shares of all five vaccine makers have lost significant ground in recent months, NVAXâs have fared the worst, tumbling 62% since the beginning of the year. In comparison, shares of MRNA and BNTX have fallen 40% and 38%, respectively, while Big Pharma stock PFE has slid 15%. JNJ, which also sells medical devices and consumer products, has seen its stock climb 7%.
Meanwhile, the market for COVID-19 vaccines appears to be weakening. According to a recent report by analytics firm Affinity, demand for vaccines dropped sharply from January to March, prompting the firm to cut its global 2022 vaccine sales projection. Likewise, a report generated by European regulators in March showed lower-than-expected uptake for Novavaxâs vaccine in that region of the world.
NVAX has also been grappling with distribution problems for its COVID-19 vaccine, with shares taking a hit in early February after a Reuters report revealed global vaccine deliveries were falling short of 2022 projections.
On the bright side, the biotech company has several other products in development. The company is currently running clinical trials for potential vaccines against seasonal influenza, respiratory syncytial virus, malaria and Ebola, along with a combination vaccine for influenza/COVID-19. Novavaxâs preclinical pipeline includes vaccine candidates targeted at the Omicron variant, MERS and SARS.
âWhile we agree that the two mRNA vaccine leaders, PFE/BNTX and MRNA, will likely take up a large portion of the 2022 COVID-19 vaccine market, we believe NVAX could become a major COVID-19 vaccine player and meet revenue guidance of around $4B to $5B,â wrote Jefferies analysts, who rate NVAX a buy, in a recent note. âFor the long term, we see opportunities for new-gen vaccines.â
Is NVAX a Buy?
Wall Street analysts, on average, rate NVAX as a Strong Buy. This consensus is based on just six analysts tracked by SA. Still, over the past 90 days, four of those have rated it a Strong Buy. Meanwhile, one other expert gives the stock a Buy, while a single analyst has less than a bullish opinion, rating NVAX as a Hold. SA authors, on average, rate NVAX a Hold.
Meanwhile, SAâs Quant Ratings are flashing a strong sell signal. While NVAX earned an A in growth and a B in valuation, it received a C- in revisions and D- in profitability and momentum.
For a more in-depth look at Novavax, check out SA contributor Juxtaposed Ideas âNovavax: Disappointing Performance Despite PromisesâPoor Outlook Aheadâ or SA contributor Keith Williamsâs âNovavax Stock Forecast: Where Is It Likely Headed by 2025?â