Novavax Stock Moves Lower after Q2 Revenue Miss

The firm said it will be able to meet U.S. demand for COVID-19 vaccines

Digital Content Manager
Aug 11, 2020 at 10:55 AM
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The shares of Novavax, Inc. (NASDAQ: NVAX) are down 13.1% at $155.20 this morning, after the pharmaceutical company reported slimmer-than-expected second-quarter losses of $0.30 per share, but revenue that missed expectations. Nevertheless, executives said Novavax has enough capacity to meet U.S. demand for COVID-19 vaccines in 2021, which they expect to be as high as 600 million doses.

The equity had been soaring on the charts before today's drop, months after joining the race for a potential coronavirus treatment. Shares were getting consistent support from the stock's 10-day moving average since June, resulting in a four-year high of $189.40 on Aug. 5. Now, the equity is testing its footing at the aforementioned 10-day, though year-over-year, it still sports a jaw-dropping 3,727.3% lead.

Digging deeper, analysts were mostly optimistic toward the stock coming into today, with five of the seven in coverage sporting a "strong buy" rating, while the remaining two carried a tepid "hold" or worse. Meanwhile, the stock's 12-month consensus price target of $227.60 is a 47.6% premium to current levels, meaning price target cuts could very well be on the horizon.

That upbeat analyst sentiment is not reflected in the options pits, where puts are far more popular. NVAX sports a 10-day put/call volume ratio at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) that sits in the 95th percentile of its annual range. This suggests a healthier-than-usual appetite for bearish bets of late.

Today's news could be shifting the tide, however. At last check, 11,000 calls have crossed the tape -- three times the average intraday amount, and more than twice the number of puts traded. Most popular is the weekly 8/14 200-strike call, followed by the 177.50-strike call in the same series, with new positions being opened at the latter.

Despite short interest for NVAX being down 14.5% in the most recent reporting period, it looks as if bears are still in control. The 8.13 million shares sold short make up no less than 34.6% of the stock's available float, or almost a day's worth of pent-up buying power.

Also worth noting is the security's Schaeffer's Volatility Scorecard (SVS), which sits relatively high at 85 out of 100. This means Novavax stock has tended to exceed option traders' volatility expectations during the past year -- a good thing for option buyers.


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