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Why Is Novavax (NVAX) Up 43.9% Since Last Earnings Report?

·3 min read

A month has gone by since the last earnings report for Novavax (NVAX). Shares have added about 43.9% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Novavax due for a pullback? 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.

Novavax's Q1 Loss Widens, Revenues Beat, Shares Down

Novavax incurred a loss of $3.05 per share in the first quarter of 2021, much wider than the year-ago quarter’s loss of 58 cents, and also falling short of the Zacks Consensus Estimate of a loss of $2.65 per share. This significant loss was due to higher costs to support the development of NVX-CoV2373.

Revenues in the quarter were $447 million, marking a huge improvement from $3 million reported in the year-ago quarter. Revenues increased due to services performed under the agreement with the Coalition for Epidemic Preparedness Innovations (CEPI) and participation in the U.S. government’s Operation Warp Speed (OWS) in relation to the clinical development of NVX-CoV2373. Revenues beat the Zacks Consensus Estimate of $292 million.

Quarter in Detail

In the reported quarter, research and development expenses were $593 million, significantly up from $17 million in the year-ago quarter, due to higher expenses for the development of NVX-CoV2373 and higher employee-related costs.

General and administrative expenses also rose significantly year over year to $63 million due to higher employee-related and stock-based compensation expenses, as well as costs for supporting NVX-CoV2373’s development.

Novavax announced that it plans to file for authorization for Novavax in the United States, United Kingdom and the EU in the second quarter of 2021 have been delayed to the third quarter.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended downward during the past month. The consensus estimate has shifted -250.95% due to these changes.

VGM Scores

Currently, Novavax has a strong 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. Notably, Novavax has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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