Novavax (NVAX) Surges 8.4%: Is This an Indication of Further Gains?
Novavax NVAX shares rallied 8.4% in the last trading session to close at $5.29. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 19% gain over the past four weeks.
Share price rose after the company announced that it has reached a settlement with Gavi Vaccine Alliance over an advance purchase agreement signed in 2021 between the two parties. Per the settlement terms, Novavax has made an upfront payment of $75 million. The company has also agreed to make deferral payments of $80 million annually till 2028-end totaling to $400 million.
With regard to the deferred payments, Gavi could also opt for payment in vaccine credits up to $80 million, wherein Gavi can use to order any of Novavax’s vaccines (funded by Gavi) for supply to low-income and lower-middle income countries. The use of this vaccine credit would reduce Novavax's annual cash obligation.
In addition to this annual obligation, Novavax will provide an additional vaccine credit of up to $225 million to satisfy additional demand, if any, during the five-year period.
This vaccine maker is expected to post break-even quarterly earnings per share in its upcoming report, which represents a year-over-year change of +100%. Revenues are expected to be $424.4 million, up 18.8% from the year-ago quarter.
While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For Novavax, the consensus EPS estimate for the quarter has been revised 78.9% higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on NVAX going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Novavax is part of the Zacks Medical - Biomedical and Genetics industry. Voyager Therapeutics VYGR, another stock in the same industry, closed the last trading session 6.1% higher at $8.18. VYGR has returned 1.3% in the past month.
Voyager Therapeutics' consensus EPS estimate for the upcoming report has remained unchanged over the past month at -$0.59. Compared to the company's year-ago EPS, this represents a change of +3.3%. Voyager Therapeutics currently boasts a Zacks Rank of #3 (Hold).
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