Novavax stock price surged by more than 20% on Thursday in its best day since July 2023 as investors cheered the strong Moderna earnings and its Covid-19 dispute with Gavi. The shares surged to a high of $4.9 but they remain about 98% below the all-time high.

Old problems remain

Novavax stock surged hard after the company ended its dispute with Gavi, the leading international vaccine group. As part of the settlement, Novavax agreed to pay the group $475 million in cash or vaccines through 2028. It has already paid $75 million and will then pay $80 million a year. 

The end of this dispute is a good one for Novavax because it provides it with more clarity and removes the liability that has existed since 2021.

Novavax stock also jumped after Moderna published strong financial results. It made $2.8 billion in the fourth quarter of the year, bringing its full-year sales to $6.7 billion. Its quarterly revenue was a 43% drop from what it made in the same period in 2022. 

Moderna’s profits also dropped from $1.46 billion in Q4’22 to $217 million in the last quarter. However, these numbers were better than what analysts were expecting. They also proved that there was still some Covid-19 demand. For one, it expects that its sales for this year will be $4 billion.

The ongoing Novavax should be taken with a grain of salt because of the financial position it finds itself in and its lack of a strong pipeline. The reality with Novavax is that it makes all of its money from Covid-19 vaccines.

These vaccines will continue seeing waning demand because the disease is not a piece of concern any more. Other than Covid, it has a malaria vaccine, which will likely not help to compensate Covid’s lost revenue.

Data shows that the total revenue for Covid-19 vaccine stood at over $64 billion in 2021 and dropped slightly to $63 billion in 2022. It stood at $14.83 billion and is expected to crash to $4.22 billion by 2028. This weak demand could decelerate at a faster pace than expected.

Covid-19 vaccine total sales per year

The most recent quarterly results showed that the company’s revenue came in at $187 million in the third quarter of 2023, down from $734 million in the same quarter in 2022. It made $424 million in the second quarter of the year.

Novavax is also not profitable, meaning that it will need to source funds to give to Gavi in the next few years. Its net loss in the past quarter stood at $130 million. It has lost over $800 million in the last five quarters.

Novavax ended the quarter with $651 million in cash and equivalents, meaning that it will likely raise additional cash in the coming years since its revenue is expected to drop. Analysts expect that its revenue for the last financial year will be $1 billion followed by $983 million this year.

Novavax stock price forecast

Novavax stock

Turning to the daily chart, we see that the NVAX stock price has made a strong bullish breakout on Thursday. This bullish breakout happened after the stock formed a falling wedge pattern. In price action analysis, this pattern is one of the most accurate bullish signs. 

It also moved slightly above the 50-day moving average. However, I suspect that this bullish breakout will turn out to be a false breakout. This means that it will likely drop and retest the lowest point at  $3.55, which is about 28% below the current level.

By Crispus Kanyaru

With a keen eye for market trends and a knack for translating complex financial concepts into engaging narratives, Crispus has established himself as a trusted voice in the world of finance. His work has graced the pages of esteemed publications like Benzinga, Forbes, Invezz, and Banklesstimes, reaching a diverse audience eager to navigate the ever-evolving financial landscape. Crispus's journey began with a deep curiosity about the forces shaping the global economy. This natural inquisitiveness led them to pursue a degree in finance and CPIA, equipping them with a solid foundation in financial theory and analysis. But Crispus knew that knowledge alone wasn't enough. He craved to bridge the gap between dry data and real-world experiences, to make finance accessible and relatable to everyone.

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