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What's in the Cards for Novavax (NVAX) This Earnings Season?

Zacks Equity Research

Novavax, Inc. NVAX will report fourth-quarter 2018 results.

In the last reported quarter, the company’s loss was on par with the Zacks Consensus Estimate. Moreover, Novavax's earnings have met estimates in three of the trailing four quarters, the average negative earnings surprise being 1.67%.

Novavax’s shares have underperformed the industry in the past year. The stock has slumped 66.2% compared with the industry’s decline of 14.3%.

Let’s see how things are shaping up for this announcement.

Factors Likely to Impact Q4 Results

Novavax is a clinical-stage biotechnology company, focused on the discovery, development and commercialization of recombinant nanoparticle vaccines to prevent serious respiratory diseases and Matrix adjuvants.

Investors’ focus will be on pipeline updates in the fourth quarter.

The company’s phase III PREPARE study on its lead vaccine candidate ResVax did not meet the primary endpoint of prevention from medically significant respiratory syncytial virus (RSV), and lower respiratory tract infection (LTRI). However, the study did show efficacy against a secondary objective of preventing hospitalization, and is the first RSV vaccine to show phase III efficacy. This news led to the crashing of shares by more than 65%.

ResVaxis being developed to protect infants by immunizing mothers against the disease, the leading viral cause of severe lower respiratory tract disease in infants and young children. 

The company is planning to meet with the U.S. and European regulatory authorities to discuss future steps. We expect more updates on this in the fourth quarter call.

In January 2019, the company released top-line phase II results for NanoFlu, its nanoparticle seasonal influenza vaccine candidate. The study showed that NanoFlu improved immune responses in adults aged 65 years or older compared with Sanofi’s SNY vaccine division’s Fluzone High-Dose, the leading influenza vaccine in older adults, in a phase II study.

What Does the Zacks Model Unveil?

Our proven model does not conclusively show an earnings beat for Novavax in the to-be-reported quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to be able to beat estimates. But that is not the case here, as you will see below.

Earnings ESP: Novavax has an Earnings ESP of -10.17% as the Most Accurate Estimate is pegged at a loss of 13 cents, while the Zacks Consensus Estimate stands at a loss of 12 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Novavax currently has a Zacks Rank #3, which increases the predictive power of ESP. However, we need to have a positive Earnings ESP to be confident of an earnings beat.

Note that Sell-rated stocks (Zacks Rank #4 or 5) going into an earnings announcement are best avoided.

Novavax, Inc. Price and EPS Surprise

Novavax, Inc. Price and EPS Surprise | Novavax, Inc. Quote

 

Stocks That Warrant a Look

Here are some stocks you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter.

BioDelivery Sciences International Inc. BDSI is scheduled to report fourth-quarter results on Mar 14. The company has an Earnings ESP of +38.46% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Tilray Inc. TLRY is expected to report fourth-quarter earnings on Mar 18. The company has an Earnings ESP of +7.41% and a Zacks Rank of 3.

Zacks' Top 10 Stocks for 2019

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