Novavax, Inc. (NASDAQ:NVAX), a clinical stage biotech company, shares fell below $1 today, and hit its lowest level since 2009. Now, the reason being: its lack of clinical data and expected cash burn, and poor fundamentals.
Novavax, Inc. Statistics and Performance
NVAX traded in a range between $0.73 and $1.05 today. NVAX has a 52-week range between $0.73 and $8.49 . Consequently, NVAX is currently just over 20% above its 52-week low, but its nearly 90% below its 52-week high. NVAX is around 40% below its 200 day SMA. Additionally, NVAX is just over 35% below its 50-day SMA. The stock has been nearly down 40% over the past month, and down over 80% over the past year, but we’ll get into the reasons why it was down later on.
Here’s a look at the stock’s performance on the daily chart:
If you look at the relative strength (RSI), it just entered oversold conditions. However, RSI would need to show signs of a potential turnaround and cross above the 30 level for it to enter into “normal” trading conditions.
Potential Reasons For Drop
In September 2016, Novavax announced that its topline data from its Phase III trial of Resolve, a treatment for respiratory syncytial virus (RSV) in adults over 60 years old, did not meet the pre-specified efficacy objectives. In addition to not meeting its primary endpoint, what may have made shareholders scared, at the time, was its inability to meet its secondary endpoint. Moreover, its vaccine did not demonstrate efficacy. Thereafter, NVAX dropped over 80% in September 2016 at one point. That said, NVAX has been trading under $2.00 since early October 2016, well below its 52-week high.
Without clinical data showing efficacy, it would be hard for Novavax to generate revenues and earnings, which is one key driver of stock performance.
NVAX has a book value per share (BVPS) of -0.02, indicating the company has negative stockholders’ equity, which indicates the company is in poor financial health and may be using too much cash. NVAX has a price-to-revenue ratio of 13.41, and a forward price-to-revenue, based on next year’s revenues estimates, of 9.07. Additionally, the stock has a price-to-sales ratio (P/S) of 18.1942. Novavax, Inc. has 267.21M shares floating, 271.2M shares outstanding, and a short ratio of 24.41%.
NVAX’s 4Q 2016 revenue fell by approximately 7.70%, year over year. However, NVAX ‘s 4Q 2016 net income grew by 27.53%, from its 4Q 2015 net income. In turn, its 4Q 2016 EPS grew by 30% from its 4Q 2015 EPS.
NVAX shares have fallen below $1, and it could be due to its fundamentals and cash burn. Moreover, the company has a BVPS of -0.02, indicating weak financial health. The company is expected to report earnings on May 4, 2016, and it’ll be interesting to see how the company’s financials are then.