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Novavax (NVAX) Stock Before Q2 Earnings: To Buy or Not to Buy?
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Novavax (NVAX - Free Report) will report its second-quarter earnings on Aug 8, before the opening bell. The Zacks Consensus Estimate for sales and earnings is pegged at $383.9 billion and $1.37 per share, respectively.
NVAX’s earnings estimates have declined from 49 cents per share to 46 cents for 2024 and from 51 cents to 34 cents for 2025 in the past 30 days.
Image Source: Zacks Investment Research
Earnings Surprise History
The biotech firm’s performance has been mixed, with the company exceeding earnings expectations in two of the trailing four quarters while missing the mark on the other two occasions. It delivered a negative four-quarter earnings surprise of 4.33%, on average. In the last reported quarter, the company’s earnings missed estimates by 0.96%.
Image Source: Zacks Investment Research
Earnings Whispers
Per our proven model, companies with the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) have a good chance of delivering an earnings beat. This is not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
In May, Novavax announced that it has signed a multi-billion dollar deal with pharma giant Sanofi (SNY - Free Report) to market its protein-based COVID-19 vaccine and also use it to develop novel COVID-19-influenza combination vaccines. As part of this deal, the company received a payment of $570 million from Sanofi, which includes $70 million in equity investment. NVAX is also eligible to receive milestone payments of up to $700 million and royalties on sales of the COVID-19 vaccine from Sanofi. The deal will be effective from Jan 1, 2025.
In May, management announced that it aligned with the FDA on the path to securing an emergency use authorization (EUA) for its updated COVID-19 vaccine for the 2024-2025 vaccination season. It intends to make the product commercially available at the beginning of the season. During the quarter, the FDA started reviewing Novavax’s regulatory filing seeking full approval for its COVID-19 vaccine. A final decision is expected before April 2025. Investors will likely be seeking updates from the company on the current status of these filings.
Investors would also seek updates from management on the progress of the company’s pipeline candidates. It is currently conducting clinical studies on multiple vaccine candidates, including stand-alone influenza vaccine, COVID-19-influenza combination (CIC) vaccine and high-dose COVID vaccines. Management expects to start a late-stage program on the influenza and CIC vaccines in the second half of 2024, with the intent to market the same in 2026 commercially.
Novavax is also progressing well with its preclinical pipeline, which includes a vaccine for H5N1 bird flu. It is also advancing core technology for different uses like mucosal vaccination and high-density nanoparticles.
A single quarter’s results are not so important for long-term investors. Let us delve deeper to understand whether to buy, sell, or hold Novavax’s stock.
Price Performance & Valuation
Year to date, Novavax’sshares have surged 145.4% against the industry’s decline of 2.2%. The stock has also outperformed the sector as well as the S&P 500.
NVAX Stock Outperforms Industry, Sector & S&P 500
Image Source: Zacks Investment Research
From a valuation standpoint, Novavax seems to be trading at a discount to the industry. Going by the price/sales (P/S) ratio, the company’s shares currently trade at 1.65 trailing sales, lower than both the 2.55 for the industry and the stock’s mean of 5.51.
Image Source: Zacks Investment Research
Investment Thesis
Compared with other COVID-19 vaccine makers like Pfizer (PFE - Free Report) and Moderna (MRNA - Free Report) , Novavax was not able to reap benefits related to the pandemic due to the delayed launch of its COVID-19 vaccine. During last year’s vaccination season, Novavax’s sales suffered due to delayed approval of its vaccine formulation and product launch. This year, the company has already filed for the FDA’s approval of its updated COVID-19 vaccine, which could facilitate the company to participate alongside its peers in the upcoming vaccination season. We believe that this early participation could allow NVAX to capitalize on the opportunity.
The positive cash flow generated from the Sanofi deal also allows Novavax to fund the late-stage clinical program on its own influenza and CIC vaccines.
Conclusion
An encouraging data readout from any of the company’s pipeline candidates could help this #3 Ranked stock surge further. Investors who already own the stock may stay invested as Novavax faced its biggest obstacle — the threat to going concern — quite well and already started preparing to advance its clinical pipeline. Any major drop in the stock’s price can be an opportunity for long-term investors to buy it.
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Novavax (NVAX) Stock Before Q2 Earnings: To Buy or Not to Buy?
Novavax (NVAX - Free Report) will report its second-quarter earnings on Aug 8, before the opening bell. The Zacks Consensus Estimate for sales and earnings is pegged at $383.9 billion and $1.37 per share, respectively.
NVAX’s earnings estimates have declined from 49 cents per share to 46 cents for 2024 and from 51 cents to 34 cents for 2025 in the past 30 days.
Earnings Surprise History
The biotech firm’s performance has been mixed, with the company exceeding earnings expectations in two of the trailing four quarters while missing the mark on the other two occasions. It delivered a negative four-quarter earnings surprise of 4.33%, on average. In the last reported quarter, the company’s earnings missed estimates by 0.96%.
Earnings Whispers
Per our proven model, companies with the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) have a good chance of delivering an earnings beat. This is not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Novavax has an Earnings ESP of -70.16% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Factors Shaping Upcoming Results
In May, Novavax announced that it has signed a multi-billion dollar deal with pharma giant Sanofi (SNY - Free Report) to market its protein-based COVID-19 vaccine and also use it to develop novel COVID-19-influenza combination vaccines. As part of this deal, the company received a payment of $570 million from Sanofi, which includes $70 million in equity investment. NVAX is also eligible to receive milestone payments of up to $700 million and royalties on sales of the COVID-19 vaccine from Sanofi. The deal will be effective from Jan 1, 2025.
In May, management announced that it aligned with the FDA on the path to securing an emergency use authorization (EUA) for its updated COVID-19 vaccine for the 2024-2025 vaccination season. It intends to make the product commercially available at the beginning of the season. During the quarter, the FDA started reviewing Novavax’s regulatory filing seeking full approval for its COVID-19 vaccine. A final decision is expected before April 2025. Investors will likely be seeking updates from the company on the current status of these filings.
Investors would also seek updates from management on the progress of the company’s pipeline candidates. It is currently conducting clinical studies on multiple vaccine candidates, including stand-alone influenza vaccine, COVID-19-influenza combination (CIC) vaccine and high-dose COVID vaccines. Management expects to start a late-stage program on the influenza and CIC vaccines in the second half of 2024, with the intent to market the same in 2026 commercially.
Novavax is also progressing well with its preclinical pipeline, which includes a vaccine for H5N1 bird flu. It is also advancing core technology for different uses like mucosal vaccination and high-density nanoparticles.
A single quarter’s results are not so important for long-term investors. Let us delve deeper to understand whether to buy, sell, or hold Novavax’s stock.
Price Performance & Valuation
Year to date, Novavax’sshares have surged 145.4% against the industry’s decline of 2.2%. The stock has also outperformed the sector as well as the S&P 500.
NVAX Stock Outperforms Industry, Sector & S&P 500
From a valuation standpoint, Novavax seems to be trading at a discount to the industry. Going by the price/sales (P/S) ratio, the company’s shares currently trade at 1.65 trailing sales, lower than both the 2.55 for the industry and the stock’s mean of 5.51.
Investment Thesis
Compared with other COVID-19 vaccine makers like Pfizer (PFE - Free Report) and Moderna (MRNA - Free Report) , Novavax was not able to reap benefits related to the pandemic due to the delayed launch of its COVID-19 vaccine. During last year’s vaccination season, Novavax’s sales suffered due to delayed approval of its vaccine formulation and product launch. This year, the company has already filed for the FDA’s approval of its updated COVID-19 vaccine, which could facilitate the company to participate alongside its peers in the upcoming vaccination season. We believe that this early participation could allow NVAX to capitalize on the opportunity.
The positive cash flow generated from the Sanofi deal also allows Novavax to fund the late-stage clinical program on its own influenza and CIC vaccines.
Conclusion
An encouraging data readout from any of the company’s pipeline candidates could help this #3 Ranked stock surge further. Investors who already own the stock may stay invested as Novavax faced its biggest obstacle — the threat to going concern — quite well and already started preparing to advance its clinical pipeline. Any major drop in the stock’s price can be an opportunity for long-term investors to buy it.