Today's Dead Cat Bounce Stock: Novavax (NVAX)

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 $15.1 million.
  • NVAX has traded 573,342 shares today.
  • NVAX is up 3.1% today.
  • NVAX was down 7.2% 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 5 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 3.8 million shares per day over the past 30 days. Novavax has a market cap of $1.3 billion and is part of the health care sector and drugs industry. The stock has a beta of 1.67 and a short float of 20.4% with 11.86 days to cover. Shares are down 4.3% year-to-date as of the close of trading on Monday.

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

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, disappointing return on equity and feeble growth in its earnings per share.

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 28.9% when compared to the same quarter one year ago, falling from -$15.30 million to -$19.73 million.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. 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 has improved earnings per share by 11.1% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, NOVAVAX INC reported poor results of -$0.31 versus -$0.22 in the prior year. For the next year, the market is expecting a contraction of 1.6% in earnings (-$0.32 versus -$0.31).
  • The gross profit margin for NOVAVAX INC is rather high; currently it is at 50.97%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, NVAX's net profit margin of -240.16% significantly underperformed when compared to the industry average.
  • NVAX's debt-to-equity ratio is very low at 0.01 and is currently below that of the industry average, implying that there has been very successful management of debt levels.

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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