Novavax (NVAX) Marked As A Dead Cat Bounce Stock

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified Novavax ( NVAX) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Novavax as such a stock due to the following factors:

  • NVAX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $13.6 million.
  • NVAX has traded 1.1 million shares today.
  • NVAX is up 3.4% today.
  • NVAX was down 7.9% yesterday.

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More details on NVAX:

Novavax, Inc., a clinical-stage biopharmaceutical company, focuses on discovering, developing, and commercializing recombinant protein nanoparticle vaccines and adjuvants. Currently there are 3 analysts that rate Novavax a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Novavax has been 4.0 million shares per day over the past 30 days. Novavax has a market cap of $1.1 billion and is part of the health care sector and drugs industry. The stock has a beta of 1.04 and a short float of 13.5% with 8.62 days to cover. Shares are down 17.6% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Novavax as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income and weak operating cash flow.

Highlights from the ratings report include:
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Biotechnology industry. The net income has significantly decreased by 38.1% when compared to the same quarter one year ago, falling from -$10.00 million to -$13.81 million.
  • Net operating cash flow has significantly decreased to -$20.43 million or 93.05% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Biotechnology industry and the overall market, NOVAVAX INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • NOVAVAX INC reported flat earnings per share in the most recent quarter. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, NOVAVAX INC reported poor results of -$0.31 versus -$0.22 in the prior year. This year, the market expects an improvement in earnings (-$0.26 versus -$0.31).
  • The gross profit margin for NOVAVAX INC is currently very high, coming in at 72.65%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -185.07% is in-line with the industry average.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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