Rising government bond yields in response to surging inflation, a significant decline in crude oil due to worries around COVID-19 lockdowns in China, and the ongoing Russia-Ukraine war, have fueled the latest stock market retreat. The United States 10-year yield improved nearly 2.8% intraday. The Dow Jones Industrial Average has slumped 1.8% over the past five days, while the S&P 500 index has declined 3.7% over the last five days.
But despite the heightened market volatility, certain stocks with strong financials and solid growth prospects have the potential to withstand the current economic and geopolitical headwinds. So, it could be profitable to invest in fundamentally strong growth stocks, which are expected to offer good returns relative to the broader market in the coming months.
Given the backdrop, Wall Street analysts expect quality stocks Novavax, Inc. (NVAX), Virgin Orbit Holdings, Inc. (VORB), and TuSimple Holdings Inc. (TSP) to advance tremendously in the coming months.
Novavax, Inc. (NVAX)
NVAX in Gaithersburg, Md., is a biotechnology company. It focuses on discovering, developing, and commercializing vaccines for serious infectious diseases. The company’s vaccine candidates include NVX-CoV2373, a coronavirus vaccine candidate, NanoFlu, a nanoparticle seasonal equipment influenza vaccine candidate, and ResVax, a respiratory syncytial virus fusion protein nanoparticle vaccine candidate.
On April 8, NVAX and Serum Institute of India Pvt. Ltd., the world’s largest vaccine manufacturer, received emergency use authorization (EUA) from the Thailand Food and Drug Administration (Thai FDA) for Novavax’s protein-based vaccine for active immunization to prevent COVID-19 caused by severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2). The vaccine is expected to maintain sustained demand globally due to the resurgence of COVID-19 cases.
On March 23, NVAX and Serum Institute of India announced the first emergency use authorization of Novavax’s COVID-19 vaccine in adolescents aged between 12 and 18 in India. This might expand global access to the Novavax vaccine.
In its fiscal 2021 fourth quarter, ended Dec. 31, 2021, NVAX's revenue from royalties and other increased 523.6% year-over-year to $127.21 million. The company’s cash and cash equivalents improved 173.8% from the prior year to $1.52 billion. And NVAX’s total current assets rose 72.7% year-over-year to $2.16 billion for its fiscal year 2021 (ended Dec. 31, 2021).
The $901.87 million consensus revenue estimate for its fiscal year 2022 first quarter, ended March 31, 2022, represents 285.6% growth from the same period in 2021. And the $3.38 consensus EPS estimate for the to-be-reported quarter indicates a 210.8% year-over-year rise.
The stock declined 59.8% in price year-to-date. However, the 12-month median price target of $179.86 indicates a 212.6% potential upside from yesterday’s closing price of $57.54. The price targets range from a low of $83.00 to a high of $250.00. Among the seven Wall Street analysts that rated NVAX, five rated it Buy, while two rated it Hold.
Virgin Orbit Holdings, Inc. (VORB)
VORB is a vertically integrated space company. The Long Beach Calif.-based company operates responsive space launch systems and solutions for small satellites. VORB also offers launch services for national security and defense, civil spaceports, and commercial customers in the U.S and internationally.
This month, VORB and the Satellite Applications Catapult, an independent innovation and technology company, agreed to launch the latest satellite, Amber-1, in Catapult’s In-Orbit Demonstration (IOD) program, into space from a U.K. spaceport later this year. Amber-1 is expected to provide Maritime Domain Awareness (MDA) data to users. This collaboration might boost the company’s growth globally.
VORB's net cash provided by financing activities increased 526.7% year-over-year to $213.77 million in its fiscal year 2021 fourth quarter, ended Dec. 31, 2021. VORB’s cash and cash equivalents improved 765.5% year-over-year to $194.15 million for its fiscal 2021 (ended Dec. 31, 2021). The company’s total current assets rose 551.8% from the prior year to $238.78 million
Analysts expect VORB's revenue for its fiscal year 2022, ending Dec. 31, 2022, to come in at $71.50 million, representing an 868.2% rise year-over-year.
VORB stock has increased 6.6% in price over the past month and closed yesterday's trading session at $6.43.
The sole Wall Street analyst that rated VORB rated it Buy. The 12-month median price target of $20.00 indicates a 211% potential upside.
TuSimple Holdings Inc. (TSP)
TSP is an autonomous technology company. The San Diego, Calif.-based concern develops autonomous technology that is primarily designed for semi-trucks in the U.S. and internationally. TSP operates its Autonomous Freight Network (AFN) and L4 autonomous semi-trucks equipped with its autonomous driving technology. The company develops its products through its partners, including Navistar and TRATON.
On March 29, TSP partnered with Loadsmith, the leading third-party logistics provider. “This new partnership further validates the appetite for SAE L4 technologies alongside the TuSimple autonomous freight network fostering the expedited commercialization of safe, efficient, and sustainable transportation of freight throughout the United States,” said Xiaodi Hou, co-founder and CEO of TSP.
In February, TSP announced that Union Pacific Corporation (UNP) was the first customer to move freight on TSP’s fully automated trucking route between the Tucson and Phoenix, Arizona metro areas. TSP plans to utilize autonomous vehicle (AV) technology to carry Driver Out freight for Union Pacific. It is expected to boost its plans to continue Driver Out operations and scale to commercial viability.
In its fiscal 2021 fourth quarter, ended Dec. 31, 2021, TSP's revenues increased 178.2% year-over-year to $2.05 million. The company’s cash and cash equivalents improved 330.3% from the previous year to $1.34 billion. Its total current assets rose 323.6% year-over-year to $1.35 billion for its fiscal year 2021 (ended Dec. 31, 2021). TSP’s net cash provided by financing activities came in at $1.30 billion, registering a 264.4% increase from the prior year.
The $2.96 million consensus revenue estimate for its fiscal year 2022 first quarter, ended March 31, 2022, represents a 214% year-over-year rise. Analysts expect TSP's EPS to grow 44% year-over-year for the to-be-reported quarter. TSP has surpassed the consensus EPS estimates in each of the trailing four quarters.
The stock improved 12.3% in price over the past month. It closed yesterday's trading session at $10.69.
Each of the nine Wall Street analysts that rated TSP rated it Buy. The 12-month median price target of $34.75 indicates a 225.1% potential upside. The price targets range from a low of $24.00 to a high of $54.00.
NVAX shares were trading at $60.25 per share on Tuesday morning, up $2.71 (+4.71%). Year-to-date, NVAX has declined -57.89%, versus a -6.45% rise in the benchmark S&P 500 index during the same period.
About the Author: Mangeet Kaur Bouns
Mangeet’s keen interest in the stock market led her to become an investment researcher and financial journalist. Using her fundamental approach to analyzing stocks, Mangeet’s looks to help retail investors understand the underlying factors before making investment decisions.
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