The stock market has seen a lot of volatility lately, and Friday morning was no exception. The major indices opened higher, then fell and fell into negative territory before flattening out near the level unchanged. Just after 11 amEDT today, the Dow Jones Industrial Average (DJINDICES: ^ DJI) It dropped 14 points to 26,721. the S&P 500 (SNPINDEX: ^ SPX) It rose 4 points to 3,220, and the Nasdaq compound (NASDAQINDEX: ^ COMP) It was higher by just 2 points at 10,476.
Just because the Dow and other indices were flat doesn’t mean there is no excitement in the market. Netflix (NASDAQ: NFLX) It fell sharply under pressure after its second-quarter earnings report on Thursday night. But Novavax (NASDAQ: NVAX) found that its stock was moving sharply higher for the second consecutive day.
Fade to black for Netflix?
Netflix shares fell nearly 7% on Friday morning. Investors continued to weigh the conflicting readings they got from the company’s second-quarter financial report and outlook.
The quarter’s results were extremely favorable for Netflix. The video streaming giant added 10.1 million subscribers from April to June, easily surpassing the 7.5 million additions that Netflix had predicted three months ago. Revenue increased 25% year-over-year, and improved margins helped the company’s bottom line, offset only by a few special charges that depressed earnings per share and prevented Netflix from meeting expectations.
Image source: Netflix.
However, the problem is that Netflix tried to control the growing expectations for the rest of the year. Now that people are starting to get back to work after the coronavirus-imposed business closings, the video streaming provider expects the rate of subscription growth to slow down necessarily. Investors did not like the projection of just 2.5 million new subscribers for the third quarter, nor do they want to see slow revenue growth at just over 20%.
Bullish investors hope that Netflix is simply lowering its guidance to make it easier to beat the lowered expectations next quarter. The decline in shares suggests that shareholders are at least taking the less optimistic view seriously.
Novavax looks healthier than ever
Elsewhere, Novavax shares rose 15%, setting another record for biotech stocks. Enthusiasm for the prospects for a coronavirus vaccine has already pushed the stock to triple digits after trading as low as $ 4 a share in January.
Novavax rose from 8% to 9% on Thursday after analysts provided positive feedback on the company. The federal government had initially dropped Novavax from its Operation Warp Speed coronavirus-fighting program, but earlier this month, the company’s candidate vaccine NVX-CoV2373 was added to the elite list. That put $ 1.6 billion in Novavax’s pocket and, more importantly, added credibility to the company’s development program.
Thursday’s rise to $ 120 a share was not enough to match Wainwright’s $ 132 target price or B. Riley FBR’s target of $ 155. But the continued rise on Friday morning surpassed Wainwright’s view , affirming their hopes that Novavax could claim at least a tenth of the COVID-19 vaccine market in the coming years.
There is still a lot of competition among biotech stocks to solve the coronavirus crisis, and Novavax is far from dominating the field. However, many see that the company is more likely to benefit from a vaccine, and those hopes will drive equity movements in the coming months.
