Why Shares Of Novavax Are Down By 8% Today?

Novavax Video 10.05.21.

Novavax Shares Dive Amid Reports That The Company Would Not Seek Emergency Use Authorization In U.S. Until June

Shares of Novavax found themselves under strong pressure after reports indicated that the company would not seek emergency use authorization in the U.S. for its coronavirus vaccine until June.

Shares of Novavax showed great performance in 2020 as traders rushed to buy shares of all vaccine makers. The start of 2021 was strong as well, but the stock lost momentum in mid-February and lost half of its value since then.

At this point, it is not clear when Novavax will seek emergcy use authorization for its vaccine, and the decision from the regulator may also take some time as it was the case with other coronavirus vaccines. In this light, Novavax investors will have to wait for several months before they learn the outcome of this story, which is bearish for the stock.

What’s Next for Novavax?

Novavax is set to report earnings today, after the market close. Analysts expect that Novavax will report a loss of $3.60 per share. The company’s earnings are projected to rise fast and reach $21.32 for the full year 2021. In 2022, Novavax is projected to report earnings of $32.84 per share. The stock is trading at just 5 forward P/E for 2022 which is extremely cheap.

However, it should be noted that analyst forecasts depend on the speed of emergency use authorization for the company’s coronavirus vaccine. As the latest reports indicate that it could be delayed, analysts may soon adjust their earnings estimates. In addition, it is not clear whether revenue from the vaccine will be recurring, although this uncertainty impacts shares of all vaccine makers.

In this light, traders should not focus on the extremely cheap forward P/E as the company’s success depends on a number of catalysts. If the company fails to seek emergency use authorization for its COVID-19 vaccine in June, the stock may find itself under more pressure.

For a look at all of today’s economic events, check out our economic calendar.