Down 60% from 52-week highs, is Novak Resonance stock worth buying?

Over the past 12 months.Novavax (NASDAQ: NVAX)The once-promising COVID vaccine maker has been struggling; it's been slow to get its vaccine approved for the market, and now, as some of the COVID concerns subside, its immediate future doesn't look good.

But with the medicinal healthcare stock down more than 60% from its 52-week high of $11.36 and a market capitalization of about $620 million, is it cheap enough for investors to take a chance?

Novartis continues to focus on COVID.

Novavax's COVID-19 vaccine has been approved and the company is also optimistic about a combined influenza and COVID-19 vaccine, which is currently in Phase II testing. The vaccine is currently in Phase II testing and may enter Phase III testing later this year, with a potential launch in 2026. Includesgloriousrespond in singingModerna Other vaccine manufacturers, including Novavax, are also developing their own influenza and COVID combination vaccines, so Novavax will certainly face a lot of competition.

Another problem is that COVID is no longer a public concern. According to a recent Pew Research Center survey, only 28% of U.S. adults said they had received an up-to-date COVID vaccine in the past six months, while 44% had received a flu shot. Only 10% were concerned that COVID would lead to hospitalization.

Unless there is a surge in COVID cases, the already low demand for COVID vaccine is likely to decrease further in the future.

Companies are cutting costs, but is that enough?

Novavax has previously issued a going concern risk report stating that the company may not survive. At the end of 2023, the company's total cash and cash equivalents were $568.5 million. But last year, the company burned through less than $714 million in day-to-day activities.

The company said it reduced its operating expenses by $41% compared to the previous year, and its headcount by $30% from the first quarter of 2023. but for a business without a huge catalyst for growth, that may still not be enough for the company to avoid going to the stock market to raise cash, thereby diluting existing shareholders.

This year, Novavax expects its revenues to be in the range of $800 million to $1 billion. But the company also expects total research and development and total selling, mass and administrative costs to be as high as $800 million; it is highly likely that Novavax will continue to lose money. Last year, the company lost US$545.1 million.

Should you buy Novavax stock?

Although Novavax's share price seems cheap compared to the past, it is still not worth investing in now. The company is burning through a lot of cash, its business operations are not sustainable, and the possibility of a future stock offering remains high. Until that changes, and the company launches products that don't rely on COVID-related demand, investors would be wise to stay away from the stock; things could still get worse for Novavax.

Should you invest $1,000 in Novavax now?

Before buying Novavax stock, consider the following:

Motley Fool Stock AdvisorThe analyst team has just named what they believe to be the best value for investors.10Only ...... and Novavax were not included. These 10 stocks are expected to bring in good returns over the next few years.

Stock AdvisorIt provides investors with an easy-to-understand blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. Since 2002, StockAdvisorThe service has more than doubled the return on the S&P 500 Index.

View 10 stocks only

*Stock Advisory Rates as of April 8, 2024

David Jagielski does not own any of the stocks mentioned above.The Motley Fool owns shares of Terry's Inc.The Motley Fool recommends Moderna.The Motley Fool has a disclosure policy.

Down 60% From 52-Week High, Is Novavax Stock Worth Buying? This post was originally published by The Motley Fool.