What happened
Shares of the vaccine specialist Novavax (NVAX -0.71%) are having another rough session today. Specifically, the biotech's stock is down by 8% as of 1 p.m. ET Friday.
What's causing investors to hit the exits today? Despite an encouraging fourth-quarter earnings report earlier this week, Novavax can't seem to shed the perception among some investors that it simply won't be able to compete effectively during the rapidly approaching endemic phase of COVID-19.
Image source: Getty Images.
So what
What's important to understand is that the endemic stage of the pandemic will be characterized by considerably lower infection rates worldwide. By extension, the commercial opportunity for all COVID-19 vaccine-makers ought to be markedly smaller than it was during the acute phase of the viral outbreak.
Novavax, in turn, might experience a hefty downturn in annual sales after this year. Speaking to this point, Wall Street's most optimistic revenue forecast has the company's top line declining by 18.7% in 2023.
Complicating matters further, Novavax probably won't have its next major growth product -- a combined COVID-19/flu vaccine -- on the market until 2024 at the earliest. After all, this experimental combo vaccine will only yield phase 1 trial data this coming April.
Now what
Is Novavax's stock a buy on this latest weakness? On the bull side of things, Novavax's shares are now trading at a meager 2.3 times Wall Street's low-end 2023 revenue estimate. That's cheap no matter how you slice it. So there's definitely a solid "buy" case to be made for this mid-cap biotech stock.
Then again, this moody market is taking no chances when it comes to future revenues. As such, it might be a good idea to wait to buy shares until the company reports the first batch of data for its combined coronavirus/flu vaccine later this year.
