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Novavax (NVAX) Down 7.6% Since Last Earnings Report: Can It Rebound?

A month has gone by since the last earnings report for Novavax (NVAX). Shares have lost about 7.6% 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 its most recent earnings report in order to get a better handle on the important catalysts.

Q3 Earnings Miss, Sales Beat Estimates

Novavax incurred a loss of $2.15 per share for third-quarter 2022, which missed the Zacks Consensus Estimate of earnings of $2.21. In the year-ago quarter, NVAX posted a loss of $4.31 per share.

Revenues for the quarter were $735 million, up 311% year over year. Revenues beat the Zacks Consensus Estimate of $552 million.

Quarter in Detail

During the third quarter, NVAX sold 35 million doses of NVX-CoV2373, its protein-based COVID-19 vaccine. The company generated $626 million in product sales. In the year-ago quarter, the company did not record any product sales. In the previous quarter, the company generated product sales worth $55.5 million.

NVAX recorded $2.2 million of revenues from royalties and adjuvant sales to license partners.

Novavax’s grant revenues declined 21.3% year over year to $106 million for the same period as it completed the activities required under the agreements with the Coalition for Epidemic Preparedness Innovations.

In the reported quarter, research and development expenses were $304 million, down 25.5% year over year. The downside was caused by a $98-million benefit received by the company following its settlement of a manufacturing agreement.

Selling, general and administrative expenses rose 58% year over year to $123 million. The rise in expenses was due to activities to support the commercialization of NVX-CoV2373.

As of Sep 30, 2022, Novavax had $1.3 billion of cash and cash equivalents compared with $1.4 billion as of Jun 30, 2022.

2022 Guidance Lowered

Novavax lowered its total revenue guidance for the year. It expects to record total revenues of- around $2 billion, which is at the low end of its previously-expected guidance of $2 billion and $2.3 billion.

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended downward during the past month.

The consensus estimate has shifted -182.8% due to these changes.

VGM Scores

At this time, Novavax has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, 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 C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Novavax has a Zacks Rank #4 (Sell). We expect a below average 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, Geron (GERN), has gained 10.1% over the past month. More than a month has passed since the company reported results for the quarter ended September 2022.

Geron reported revenues of $0.3 million in the last reported quarter, representing a year-over-year change of +172.7%. EPS of -$0.10 for the same period compares with -$0.08 a year ago.

Geron is expected to post a loss of $0.11 per share for the current quarter, representing a year-over-year change of -10%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.

Geron 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.

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