It has been about a month since the last earnings report for Novavax (NVAX Quick QuoteNVAX - Free Report) . Shares have lost about 14.7% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Novavax due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Q1 Earnings & Revenues Miss Estimates

Novavax incurred a loss of $3.41 per share for first-quarter 2023, which was wider than the Zacks Consensus Estimate of a loss of $3.38. In the year-ago quarter, NVAX posted earnings of $2.56 per share.

Revenues in the quarter amounted to $80.9 million, down 88.5% year over year. The downside in total revenues was caused by the emerging seasonal demand pattern for COVID vaccines. total revenues missed the Zacks Consensus Estimate of $82.5 million.

Quarter in Detail

Novavax is currently marketing different versions of its protein-based COVID-19 vaccine — one marketed in partnership with the Serum Institute of India (Serum) under the trade name Covovax and another version produced by Novavax that is marketed under the trade name Nuvaxovid. In the United States, the vaccine is marketed as Novavax COVID-19 Vaccine, Adjuvanted.

During the quarter, the company recorded net reversal of $7.5 million of product sales against product sales of $585.6 million in the year-ago quarter. The reported product sales figure included a $65.0-million revenue reversal associated with doses delivered last year that were scheduled for future replacement.

Grant revenues declined 12.0% year over year to $87.4 million for the same period.

Novavax recorded $1.0 million of revenues from royalties and adjuvant sales to license partners, a substantial decline from the year-ago quarter’s revenue of $19.0 million.

In the reported quarter, R&D expenses were $247.1 million, down 35.6% year over year. The downside was primarily caused due a reduction in clinical and manufacturing spendings during the quarter.

SG&A expenses were up 17.2% year over year to $112.5 million. The rise in expenses was driven by activities to support the commercialization of Novavax’s COVID-19 vaccine program.

As of Mar 31, 2023, Novavax had $637.0 million of cash and cash equivalents compared with $1.34 billion as of Dec 31, 2022. This substantial fall in cash balance is on account of reduction in outstanding current liabilities by $541.0 million.

Initiates Cost Reduction Plan

Alongside its Q1 earnings, management announced its global restructuring and cost-reduction plans to curb cash burn and extend the existing cash runway. Per this plan, it aims to reduce 25% of its existing workforce.

The undertaking of the above plan will help the company reduce its combined R&D and SG&A expenses. Management expects to reduce combined expenses by around 40-50% in 2024 and 20-25% in 2023, compared with the expenses incurred in 2022.

2023 Guidance

Management issued fresh guidance for full-year 2023. Novavax expects to record total revenues between $1.4-$1.6 billion. This guidance includes product sales, which are expected to be between $1.06-$1.24 billion. Grant revenues are forecasted in the range of $340-$360 million.

Per management, the increased revenue guidance is backed by advance purchase agreements (APAs) signed by Novavax with ex-U.S. countries, committing dose delivery schedules of approximately $800 million in 2023.

In 2023, management expects to incur combined R&D and SG&A expenses in the range of $1.3-$1.4 billion. These projected figures exclude a one-time restructuring charge of $10-$15 million to be incurred by the company in connection with the ongoing restructuring plan, as employee severance and benefit costs. The company expects to incur the majority of this restructuring charge in second-quarter 2023.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in fresh estimates.

The consensus estimate has shifted 28.23% due to these changes.

VGM Scores

At this time, Novavax has an average Growth Score of C, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Novavax has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Novavax belongs to the Zacks Medical - Biomedical and Genetics industry. Another stock from the same industry, Apellis Pharmaceuticals, Inc. (APLS Quick QuoteAPLS - Free Report) , has gained 0.8% over the past month. More than a month has passed since the company reported results for the quarter ended March 2023.

Apellis Pharmaceuticals, Inc. reported revenues of $44.85 million in the last reported quarter, representing a year-over-year change of +211.9%. EPS of -$1.56 for the same period compares with -$1.42 a year ago.

For the current quarter, Apellis Pharmaceuticals, Inc. is expected to post a loss of $1.33 per share, indicating a change of +8.9% from the year-ago quarter. The Zacks Consensus Estimate has changed +0.5% over the last 30 days.

Apellis Pharmaceuticals, Inc. has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of F.