Will Novavax Stock Bounce Back After Falling 10% Last Week?


Novavax (NASDAQ: NVAX) stock has declined by almost 10% over the last week (five trading days), compared to the S&P 500 which has remained roughly flat over the same period. There have been multiple developments that appear to have impacted the stock. Earlier this month, the company published a weaker than expected set of Q2 2021 results, with both its revenues and loss per share missing market estimates. Moreover, the company said that it would be delaying its plan to apply for emergency use authorization with the U.S. FDA to Q4 2021, instead of Q3. With U.S. Covid-19 cases surging and the U.S. government planning to offer booster shots to fully vaccinated Americans, investors are likely concerned that Novavax, which already lost out on the initial round of vaccine demand, could miss out yet again. Separately, on Friday, the European Union indicated that it expects Novavax to submit key data required for approval of its Covid-19 vaccine only around October, likely marking another setback to the company’s launch timeline in the E.U.

So will Novavax stock continue to decline in the coming weeks and months, or is a recovery looking more likely from current levels?

According to the Trefis Machine Learning Engine, which identifies trends in a company’s historical stock price data, returns for Novavax stock average close to 10% in the next month (21 trading days) period after experiencing a 10% decline over the last five trading days. The stock is also likely to outperform the S&P 500 over the next month, with an expected return that would be 8% higher compared to the S&P 500.

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But how would these numbers change if you are interested in holding NVAX stock for a shorter or a longer time period? You can test the answer and many other combinations on the Trefis Machine Learning to test NVAX stock chances of a rise after a fall and vice-versa. You can test the chance of recovery over different time intervals of a quarter, month, or even just one day!

MACHINE LEARNING ENGINE – try it yourself:

IF NVAX stock moved by -5% over five trading days, THEN over the next 21 trading days, NVAX stock moves an average of 5.9%, with a 52.6% probability of a positive return over this period.

Also, given a -5% movement for the stock over five trading days, it has historically witnessed an excess return of 4.3% compared to the S&P500 over the next 21 trading days, with a 47.6% percent probability of a positive excess return

Some Fun Scenarios, FAQs & Making Sense of NVAX Stock Movements:

Question 1: Is the average return for Novavax stock higher after a drop?

Answer:

Consider two situations,

Case 1: Novavax stock drops by -5% or more in a week

Case 2: Novavax stock rises by 5% or more in a week

Is the average return for Novavax stock higher over the subsequent month after Case 1 or Case 2?

NVAX stock fares better after Case 2, with an average return of 5.8% over the next month (21 trading days) under Case 1 (where the stock has just suffered a 5% loss over the previous week), versus, an average return of 6.6% for Case 2.

In comparison, the S&P 500 has an average return of 3.1% over the next 21 trading days under Case 1, and an average return of just 0.5% for Case 2 as detailed in our dashboard that details the average return for the S&P 500 after a fall or rise.

Try the Trefis machine learning engine above to see for yourself how Novavax stock is likely to behave after any specific gain or loss over a period.

Question 2: Does patience pay?

Answer:

If you buy and hold Novavax stock, the expectation is over time the near-term fluctuations will cancel out, and the long-term positive trend will favor you – at least if the company is otherwise strong.

Overall, according to data and Trefis machine learning engine’s calculations, patience absolutely pays for most stocks!

For NVAX stock, the returns over the next N days after a -5% change over the last five trading days is detailed in the table below, along with the returns for the S&P500:

Question 3: What about the average return after a rise if you wait for a while?

Answer:

The average return after a rise is understandably lower than after a fall as detailed in the previous question. Interestingly, though, if a stock has gained over the last few days, you would do better to avoid short-term bets for most stocks – although NVAX stock appears to be an exception to this general observation.

NVAX’s returns over the next N days after a 5% change over the last five trading days is detailed in the table below, along with the returns for the S&P500:

It’s pretty powerful to test the trend for yourself for Novavax stock by changing the inputs in the charts above.

 

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