My Novavax stock price forecast was correct: what next now?

By:
on Jun 6, 2024
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  • Novavax shares have surged by over 500% from the lowest point in 2024.
  • The company recently reached a licensing deal with Sanofi.
  • Fundamentally, the company still faces numerous challenges.

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Novavax (NASDAQ: NVAX) stock price has gone parabolic this year, making it one of the best-performing companies in New York. It has soared by over 335% in 2024 and by almost 500% from its lowest level this year. This rally has brought its total market cap to over $2.5 billion.

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Novavax is still a risky company

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Novavax shares have surged recently, helped by its partnership with Sanofi, one of the biggest pharmaceutical companies globally. The partnership will see Sanofi distribute Novavax’s vaccines worldwide. 

Also, Sanofi will use Novavax’s vaccine with its flu vaccines. Also, Sanofi will take a non-exclusive license to use the Matrix-M adjuvant in vaccine products. The company has also taken a 5% stake in Novavax.

Still, despite this surge and these developments, I believe that Novavax is a highly risky company to invest in because of its exposure to COVID-19 vaccines. While these vaccines are still in demand, the trajectory is not heading in the right direction.

The most recent annual results showed that Novavax’s revenue came in at $983 million in 2023, down from over $1.98 billion a year earlier. Analysts expect that its annual revenue this year will be about $995 million followed by $422 million in 2025. 

Further, it is still unclear when Novavax will become profitable. Its annual loss stood at $1.73 billion in 2021 followed to $657 million and $545 million in 2022 and 2023, respectively. The most recent results showed that its revenue came in at $93.9 million, down from $291 million in Q4. Its loss stood at $147 million. 

Therefore, if this trend continues, the company could be forced to raise money in the next few years. It ended the last quarter with $480 million in cash and short-term investments, meaning that the cash could run out soon.

To be clear: while the Sanofi partnership is great, I don’t think its impact on the bottom line will be all that positive. 

Novavax stock price forecast

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NVAX chart by TradingView

The daily chart reveals that the NVAX share price has made a strong bullish trend in the past few weeks. It jumped after the stock formed a falling wedge pattern, which is one of the most popular signals in the market. This rebound was in line with my Novavax forecast in November last year.

Novavax shares have also formed a golden cross pattern as the 200-day and 50-day Exponential Moving Averages (EMA) formed a bullish crossover pattern. Further, it has moved above the crucial resistance point at $11.35, its highest swing in March 2023.

Oscillators like the Relative Strength Index (RSI) and the MACD have all pointed upwards. Therefore, I suspect that the stock will likely remain at an elevated level as investors reflect on the Sanofi deal. However, in the long-term, I suspect that it will come under pressure and fall below the support at $11.35.

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