AstraZeneca's (LON:AZN) Results Disappoint, Resiliency Makes it Worth a Buy

Recently, AstraZeneca (LON: AZN) has had a bit of an uptick in its share price thanks to some recent news about its work toward a COVID-19 vaccine. While the news has soured a bit, and with it the share price in recent days, it may actually still be worth looking into as a buy thanks to the overall progression of the stock price.

Recent News Doesn't Help the Company Much

The news of any kind of success on the coronavirus vaccine front should be enough to send shares of stock in the company that develops them on an upward tear. However, AstraZeneca hasn't had such benefit after announcing its own news on that front recently. The market has actually turned on AstraZeneca; yesterday, shares were down 3.4% in trading, though the company has recovered some of those losses since.

AstraZeneca's coronavirus vaccine news found that testing did prove effective. The vaccine was said to have produced both antibodies against COVID-19 and a slate of T-cells that would pursue such intruders for a minimum of two months. The count of those hunter-killer T-cells, meanwhile, didn't increase when test subjects were provided a second dose of the vaccine, and that was consistent with normal results.

However, the problem with this—and perhaps the biggest reason AstraZeneca didn't get an onrushing of new investors as a result of finding what should have been a pharmacological gold mine—is that AstraZeneca's vaccine doesn't appear to be a match for competing versions already in development.

Reports noted that AstraZeneca's version didn't seem to have the same level of efficacy as seen with Pfizer (NYSE:PFE) and BioNTex's (NASDAQ:BNTX) vaccine, or even the version out of Moderna (NASDAQ:MRNA). With over 100 separate vaccines currently under development at last report, it's not really enough to be just another one on the shelves in order to draw interest from investors.

Skepticism is Healthy at this Point

With that in mind, it would be easy to wonder why anyone would still consider this a buy, even if only a shallow one. The answer lies in the company's one-year share price graph, which has been tracing a steady, if shallow, upward gain since this time last year.

For reference, the price of a share of AstraZeneca back on July 22, 2019 was $40.33. As of this writing, it's $58.71. The company has been tracking gains all through the latter half of 2019, and likely would have continued except for the massive sell-off that hit the market back in March.

Here's the point that's actually exciting about this; even at the company's worst, the stock still managed to close at $37.79 on March 16. The very next day, the stock began to recover, and on April 14, the stock had reached $48.68. That's gain enough to wipe out all the losses seen in March, and effectively makes the worst pandemic in the last 50 years or so look like a meager bump in the road rather than a disaster that shuttered huge portions of the US economy.

There's More to a Pharmaceutical Company Than Just a COVID-19 Vaccine

A run like that suggests one critical word that begs closer examination: resiliency. Any stock that can successfully shrug off a catastrophe like the coronavirus is a stock that has significant long-term potential. In fact, when you pull your view back to five years, you discover that AstraZeneca has pretty much been synonymous with “resiliency” for the last half-decade. The stock price on July 24, 2015 was $32.88 a share.  It spent the better part of the last five years trading in a pretty narrow band between $30 and $40 per share, and even in that band, it still shows evidence of that slow upward march. Considering that AstraZeneca also pays an annual dividend of $1.86 per share, that resiliency may well make this an excellent option for long-term hold strategies.

Yes, AstraZeneca's COVID-19 vaccine data was not all it could have been, and it's likely to have a tough time competing with the other breeds out there. However, this is also going to be the kind of item that a lot of people are going to want immediately, and no one's going to be able to ramp up production fast enough to meet full market demand immediately. 

That's going to mean several companies will be able to get their versions out there. AstraZeneca may be just an also-ran right now, but in a market where most users will be ready immediately to buy what won't be there to buy in many cases, it may still pick up some sales, and that's enough to help keep this resilient but underpowered slugger in the field.