The Covid-19 pandemic has worked in the favor of pharmaceutical companies. Many have become hot picks today. Although Novavax (NASDAQ:NVAX) hasn’t had a smooth ride lately, there is a lot to look forward to. Investors tend to think that the current surge in Covid-19 cases across the globe could mean an end of the pandemic shortly but this may not be the case. Despite the dip in NVAX stock in 2021, it could have a stellar 2022.
The stock has dipped significantly over the past six months and is currently trading much lower than its all-time high. There haven’t been any major company announcements or significant events that could’ve led to this decline in the price. Therefore, it stems from investors’ lack of enthusiasm towards the company’s prospects.
This might change in 2022. NVAX stock is trading at $130 and could inch closer to $150 soon.
Here are two reasons I think the stock will move upwards.
Vaccine Demand Could Explode
Despite the rise in coronavirus cases across the globe, the cases are milder and the hospitalization rates are lower. The good news is that it could lead to lower deaths and a higher recovery rate.
However, this does not change the vaccine scenario. The demand for vaccines is not going to decline anytime soon and if the current surge continues, we could see a rise in demand.
Once an early favorite, Novavax took too long to file for Emergency Use Authorization (EUA) in the U.S. due to manufacturing and technical issues. This in turn led to the consistent dip in the stock throughout 2021.
Since the Food and Drug Administration (FDA) allows the mixing of vaccines, there will still be a demand for Novavax as a booster. It could give a huge lift to the company and will allow it to gain a larger market share.
The demand for vaccines will be a key factor for the company. If it can meet the demands by increasing the manufacturing capacity, it will be able to generate massive revenue.
On these metrics alone, NVAX stock could be a winner this year.
It is also important to keep in mind that the company only recently got authorizations from different countries and this will reflect in the bottom line for the next quarter.
Novavax Is Getting Approvals From Different Countries
Novavax already has authorization in 31 countries and this is no small feat.
The company is working towards supplying more than 200 million doses to EU countries alone. They expect a European Union EUA for their vaccine in the next few months which could take the stock higher.
Thanks to theses international authorizations, Novavax does not depend on any single country, like the United States, for revenue. It can manage to generate solid revenue by providing vaccines to developing countries and the European Union. The first-quarter numbers will be important for the investors as they will speak about the production capacity and the deliveries of the vaccine.
Novavax’s vaccine data is positive. And if it manages to roll out the vaccines on time, NVAX stock will go even higher.
The Bottom Line On NVAX Stock
The next quarter for the company could be huge and it could start generating strong revenue very soon.
There is always a risk when a stock is heavily dependant on a single product but if the company manages to move at the right time and gets the authorization, it could beat analyst projections.
NVAX stock is trading at a discount currently and the coming quarter could take it to a new high.
If the pandemic becomes endemic in the near future, we will regularly need vaccines and this is when Novavax will finally be a winner in the vaccine race.
On the date of publication, Vandita Jadeja did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Vandita Jadeja is a CPA and a freelance financial copywriter who loves to read and write about stocks. She believes in buying and holding for long term gains. Her knowledge of words and numbers helps her write clear stock analysis.