Why NovoCure Stock Was Withering on Wednesday

Cancer-focused biotech NovoCure (NASDAQ: NVCR) was the focus of a stock price target cut on Wednesday, and investors weren't particularly happy about it.

They expressed their displeasure by selling out of their positions, to the point where the company's stock was down by nearly 5% in mid-afternoon trading. As such, it was doing notably worse than the S&P 500 index, which was 0.9% in the red at that point.

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Reaching for the scalpel

The analyst behind the reduction was Wedbush's David Nierengarten, who now believes NovoCure is worth $27 per share. That's slightly below his previous price target of $29. As the change isn't significant Nierengarten, maintained his neutral recommendation on the company.

The reasons for the change weren't immediately apparent; regardless, they added to the general bearish sentiment on the underperforming stock.

For many investors, the company's final earnings report of 2024 still resonates, and not in a good way. Although the company delivered encouraging revenue growth of nearly 21% year over year in its fourth quarter of 2024 (to over $161 million), it also posted a notably steeper net loss that amounted to $0.61 per share. That figure was considerably worse than the average analyst estimate.

Worth the wait

The market is hungry for good news from NovoCure, and it's clearly getting impatient. Yet as a biotech, and one specialized in a particular form of therapy at that, the company requires time and resources to bring its products to market. I still feel it is well positioned in the cancer treatment segment, so I'd recommend patient investors consider it a discount-priced buy.

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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends NovoCure. The Motley Fool has a disclosure policy.