Novavax Remains a Risk-On Stock in a Risk-Off Market NVAX is a risk-on stock at a time investors are turning to risk-off assets. This article looks to see if Novavax still presents an opportunity for investors

• NVAX stock is down 16% this week bringing its 12-month loss to over 88%.
• The company is struggling to meet revenue expectations from its Covid-19 vaccine candidate.
• Demand for boosters is not likely to change the math in the short-term.

Novavax (NASDAQ: NVAX) was making news this week as its stock price has fallen nearly 16%. This came after President Biden's pronouncement that the pandemic was over. The president made those remarks during an interview granted to 60 Minutes.

If you're considering investing in NVAX stock, I'd be less concerned about the backtracking going on among public health and public policy experts. The on-the-ground truth is that for a great many people the pandemic does not play a significant role in their daily decision-making. Whether it should is a subject for another day and people with much more knowledge of infectious diseases than this writer.

In this article, I'm taking a look at the opportunity, if any, that NVAX stock offers investors.

The Fundamentals are Lacking

The economic reality is that Novavax may have topped out on what investors can expect to see on the revenue front. In fact, on the company's most recent earnings call, president and CEO Stan Erck stated that the company was projecting "no new revenues in 2022 from the U.S. and from (its) COVAX (facility)." The company was originally planning to sell 110 million and 350 million doses to the two entities respectively.

Nevertheless, the company is still forecasting total revenue to come in at $2 billion on the low end and up to $2.3 billion on the upper end. The first half of the year is in the books and the company has generated just under $900 million in revenue.

If the company does get a fall surge in vaccinations, this could happen, but that's unlikely to change the fact that after producing its first profitable quarter in Q1 of 2022, the company missed earnings estimates badly in the second quarter. And tellingly, perhaps, did not offer forward guidance for full-year earnings.

It Was a Great Ride

I'll admit if you were a speculative investor with the risk tolerance and the discipline to execute a trading strategy, you've probably done quite well on NVAX stock. Less than one year from that March date in 2020, Novavax closed at all-time high of $279.83. That would be a gain of over 2,700%.

But since that date the stock has given up most of those gains. And the larger question now is whether NVAX stock has the pipeline to move it higher.

It might, but it's unlikely to see such lofty heights again. And barring new vaccine approvals, it looks like NVAX stock may have more room to fall.

A Meme Stock with a Mission

It's hard not to lump Novavax in with the other meme stocks. As of this writing, NVAX stock is "still" up over 162% from March 20, 2020 – a date largely associated with the start of the pandemic. However, if you look at a wider lens, the stock is just over 4% higher than it was at this point five years ago.

What happened in the interim was the great vaccine race. And Novavax was offering a vaccine candidate that was different than what other companies such as Pfizer (NYSE: PFE) and Moderna (NASDAQ: MRNA) were offering. In this case different meant more familiar. The company's vaccine uses biotechnology that is similar to the influenza shot that is offered on an annual basis.

The hope is that if you were reluctant to get an mRNA vaccine, you might get the Novavax vaccine. But the company's vaccine was not part of Operation Warp Speed and therefore had to wait for regulatory approval.

Banking on Booster Shots

Despite all the back-and-forth debate about vaccines, about 80% of the United States is fully vaccinated. The question that arises is will individuals need to get annual, or more frequent, Covid-19 booster shots. Once again, I'm not going to weigh in on that (talk to your doctor please). But it seems logical that not all of the 80% that are currently vaccinated and perhaps boosted will continue to do so.

And even if such a market exists, Novavax is still waiting for its vaccine to be approved for use as a booster shot. It's unfortunate for Novavax because the company is offering a true alternative to the mRNA vaccines But the company didn't receive FDA approval in the United States until July 2022.

The bottom line for me is that NVAX stock is a risk-on stock at a time when investors who are staying in equities are turning to risk-off assets. With the stock price likely to move lower, speculative investors may be able to try again at a discounted price.