This Biotech Stock Plunged 20% but Wall Street Expects a 195% Recovery

By Trey Thoelcke Published Mar 15, 9:15AM EDT

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This Biotech Stock Plunged 20% but Wall Street Expects a 195% Recovery — © ipopba / iStock via Getty Images

Investing in biopharmaceutical stocks comes with more risks than some other types of stocks. Just one unsuccessful clinical trial or a lack of funding can doom biotech startups. But the rewards can be great when investors are on to a winner. Take Novavax Inc. (NASDAQ: NVAX) for example, one of the winners in the race for a COVID-19 vaccine. The Maryland-based vaccine maker was founded in 1987. Its share price fell last year as the pandemic faded from public consciousness. However, the stock is projected to almost triple in the coming year. So what’s up here? Let’s have a look.

A Healthy Recovery for Novavax?

Things are looking up for Novavax?

One-Year Price Change	Target Price	Est. One-Year Gain
−19.7%	$15.40	194.5%

The company engages in discovering, developing, and commercializing vaccines to protect against serious infectious diseases. It offers a vaccine platform that combines a recombinant protein approach, nanoparticle technology, and its patented Matrix-M adjuvant to enhance the immune response. Novavax focuses on urgent health challenges, such as vaccines for COVID-19, influenza, and a combination of the two. The company is commercializing a COVID-19 vaccine under the brand names of Nuvaxovid and Covovax, adjuvanted for adult and adolescent populations as a primary series and for both homologous and heterologous booster indications. It is also developing an adjuvant malaria vaccine.

The company’s market cap is about $732 million. That is less than those of competitors such as AstraZeneca PLC (NASDAQ: AZN | AZN Price Prediction), BioNTech S.E. (NASDAQ: BNTX), and Moderna Inc. (NASDAQ: MRNA).

The recent quarterly report was disappointing for several reasons, including revenue that fell short of expectations. The company called it a transition year, in which it made significant strides in streamlining operations and preparing for future product launches. It also projected flat to lower revenue for 2024 due to ongoing headwinds.

One headwind for Novavax was a dispute with a global vaccine organization called Gavi, the Vaccine Alliance. Novavax terminated a purchase agreement with Gavi in 2022, and the two disagreed about whether an advance payment was refundable. The dispute now appears to have been settled.

Novavax’s updated Covid vaccines received authorizations from Canada and the WHO late last year, but the company laid off 12% of its workforce early this year.

Shares are up more than 27% since the settlement of the dispute and are nearly 9% higher than at the beginning of the year. They have traded for as high as $11.36 apiece in the past year, and the all-time high is more than $300 a share, back in their meme stock days of 2021.

So, the stock has not fared well. Let’s see where the share price could go from here.

Who Is Rooting for Novavax?

Analysts’ expectations for Novavax.

Five analysts have price targets that range from $4 to $38, but notice that the low target is less than the current share price. That is, at least one analyst expects the price to slip. However, reaching the high target would be a gain of about 625% for the stock. Still, the consensus recommendation is to hold shares. Yet, the most recent analyst call (the only one seen this year) was a maintained Buy rating.

Will the stock recover and soar this year? Analysts are not in agreement about its prospects.

About the Author Trey Thoelcke →

Trey has been an editor and author at 24/7 Wall St. for more than a decade, where he has published thousands of articles analyzing corporate earnings, dividend stocks, short interest, insider buying, private equity, and market trends. His comprehensive coverage spans the full spectrum of financial markets, from blue-chip stalwarts to emerging growth companies.

Beyond 24/7 Wall St., Trey has created and edited financial content for Benzinga and AOL's BloggingStocks, contributing additional hundreds of articles to the investment community. He previously oversaw the 24/7 Climate Insights site, managing editorial operations and content strategy, and currently oversees and creates content for My Investing News.

Trey's editorial expertise extends across multiple publishing environments. He served as production editor at Dearborn Financial Publishing and development editor at Kaplan, where he helped shape financial education materials. Earlier in his career, he worked as a writer-producer at SVE. His freelance editing portfolio includes work for prestigious clients such as Sage Publications, Rand McNally, the Institute for Supply Management, the American Library Association, Eggplant Literary Productions, and Spiegel.

Outside of financial journalism, Trey writes fiction and has been an active member of the writing community for years, overseeing a long-running critique group and moderating workshop sessions at regional conventions. He lives with his family in an old house in the Midwest.