Shares of Novavax (NVAX -0.95%) jumped as much as 9.2% on Tuesday before giving up most of the gain to close up 0.4%. The initial move higher came after the company provided its fourth-quarter update following the market close on Monday. Is Novavax stock a buy after today's volatility?
Investors definitely have some reason for optimism about Novavax's near-term prospects. The company announced 2022 revenue guidance of between $4 billion and $5 billion. The midpoint of this admittedly wide range is more than four times Novavax's revenue in 2021.
More importantly, Novavax's projected revenue this year should primarily come from sales of its COVID-19 vaccine. CEO Stanley Erck said in the company's conference call that "virtually all" of the guidance is based on expected product-related sales with the exception of $600 to $800 million in grants. By comparison, more than 86% of Novavax's revenue in 2021 stemmed from grants.
So far, Novavax has won regulatory authorizations or approvals in 38 countries for its COVID-19 vaccine. The Emergency Use Listing for the vaccine from the World Health Organization is also a key prerequisite in reaching more than 130 additional countries.
Image source: Getty Images.
However, there's significant uncertainty for the demand for COVID-19 vaccines, in general, beyond 2022. It's possible that Novavax's sales could plunge after the big surge this year.
Even if Novavax's revenue is cut in half from the midpoint of its guidance range, though, the stock would trade at only 2.8 times sales. That's dirt cheap.
Novavax could also be in a strong position to win with its combo COVID-19-flu vaccine. The company expects to report results from a phase 1 study of the combo vaccine in April.
So is the vaccine stock a buy right now? My view is that it is -- at least for aggressive investors willing to take on considerable risk.
