What happened
One significant earnings-season victim of recent days is vaccine specialist Novavax (NVAX 2.06%). Although the company recently scored a big win by earning Emergency Use Authorization (EUA) in the U.S. for its Nuvaxovid coronavirus vaccine, investors were disheartened by the second-quarter results it announced earlier this week. Compounding that, several analysts piled in with bearish adjustments to their takes on the stock.
As a result, as of Thursday evening Novavax shares were down by a worrying 33% week to date, according to data compiled by S&P Global Market Intelligence.
So what
Novavax's week turned sour almost from the beginning, when the biotech divulged those second-quarter figures after market close on Monday. These revealed a troubling year-over-year revenue decline of nearly 40%, notably worse than the average analyst estimate, and a steep net loss (of $510 million), compared to analyst expectations of a solid profit. Compounding this, the company chopped its 2022 revenue guidance in half.
Much of this is attributable to considerably weakened demand for, yes, coronavirus vaccines. Investors and analysts were well aware of this dynamic, but few expected it to slam into Novavax quite this hard.
Now what
As frequently occurs in cases of big misses or shock net losses, a handful of analysts wasted no time lowering their expectations for the stock. For example, Cowen's Georgi Yordanov took an axe to his price target, cutting it down to $110 per share from his previous $150. He still believes Novavax has potential, though, as he's keeping his outperform (that is, buy) recommendation on the shares intact.
For much of the pandemic, and even now, Novavax has been running far to the back of the pack in the coronavirus vaccine race. Scoring an EUA in the U.S. was a victory for the company, sure -- but it occurred long after three other jabs had either been authorized by or received full approval from the Food and Drug Administration.
