To The Moon

The vaccine maker's recent regulatory victories aren't landing with investors.

What happened

Shares of beaten-down biotech $Novavax(NVAX)$ are under pressure yet again. The vaccine developer's shares were down by 3.3% on average trading volume as of 12:30 p.m. ET Tuesday.

For the year, Novavax's stock has now lost a staggering 79% of its value, and on Tuesday, it hit a fresh 52-week low. The stock has been locked in a downward spiral over concerns that its COVID-19 vaccine Nuvaxovid may fail to live up to expectations from a commercial standpoint.

So what

Unfortunately, these concerns appear to be reasonable. The long and short of it is that Nuvaxovid has consistently lagged behind Moderna's Spikevax and Pfizer/BioNTech's Comirnaty on the regulatory front. And the public's concern about COVID-19 seems to be firmly in retreat, which is likely to lower the demand for these vaccines.

As a result of these dual headwinds, Novavax slashed its 2022 revenue guidancein halfwhen it reported its second-quarter results last month. So, despite a series of recent regulatory victories for its coronavirus vaccine, the company's near-term outlook doesn't exactly inspire confidence.

Now what

Should bargain hunters take advantage of this prolonged sell-off in Novavax's stock? Wall Street certainly thinks so. Despite the company's markedly lower commercial outlook for Nuvaxovid, the consensus among analysts following the biotech stock is that it could appreciate by a staggering 318% over the next 12 months.

That rosy outlook seems to be based on the assumption that the market is badly misjudging the commercial potential of the company's protein-based COVID-19 inoculation. Nonetheless, investors may still want to wait for the next batch of Nuvaxovid sales data before picking up shares of this struggling healthcare company.