Novavax Stock Plummets After Covid-19 Vaccine Update

The drug maker once again delayed U.S. approval for its Covid-19 vaccine

Digital Content Manager
Aug 6, 2021 at 10:12 AM
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Biotechnology concern Novavax, Inc. (NASDAQ:NVAX) is plummeting today, last seen down 18.6% to trade at $192.20, after the drug maker said it would not seek emergency use authorization from the U.S. Federal Drug Administration (FDA) for its coronavirus vaccine until the fourth quarter, delaying the process one more time as it struggles to access raw materials and equipment. Additionally, the company posted wider-than-expected second-quarter losses of $4.75 per share, as well as a revenue miss. 

Despite the disappointing results, the equity earned a price-target hike from Jefferies to $250 from $235 this morning. Analysts are bullish towards Novavax stock, with four of the five in coverage rating it a "strong buy", while one called it a tepid "hold." Plus, the 12-month consensus target price of $265 is a 32.5% premium to the stock's current perch. 

Short sellers are celebrating today's plummet, though. Short interest rose 4.5% over the last two reporting periods, and the 6.05 million shares sold shot account for 8.2% of the equity's available float.

Meanwhile, that analyst optimism is being echoed in the options pits. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), NVAX's 50-day call/put volume ratio of 2.36 stands higher than 90% of readings from the past year. In other words, long calls are getting picked up at a faster-than-usual clip.

Drilling down to today's options activity, 14,000 calls and 6,594 puts have crossed the tape so far, which is six times the intraday average. Most popular is the weekly 8/6 200-strike call, followed by the 210-strike call in the same series, with new positions being opened at both. Buyers of these options expect upside for NVAX by the end of the day, when these contracts expire.

Novavax stock just yesterday broke through overhead pressure at the $230 mark, which had been in place since its May bear gap. Today's dip has the shares trading back below this level, though, which is reflective of the bouts of volatility the equity has face for much of the past year. Nonetheless, NVAX has added 120.3% over the last nine months.

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