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Novavax (NVAX): Analyzing Recent Performance and Future Prospects
Novavax (NVAX) has recently caught the attention of investors, becoming one of the most searched stocks on Zacks.com. This heightened interest is understandable, given the vaccine maker’s challenging performance over the past month. Shares of Novavax have declined by 9.7%, in stark contrast to the Zacks S&P 500 composite’s gain of 2.7%. Similarly, the Zacks Medical - Biomedical and Genetics industry, to which Novavax belongs, has seen a modest loss of 0.5% over the same period.
Key Factors Influencing Novavax’s Future Performance
The performance of any stock, including Novavax, is often influenced by various factors, ranging from media releases and rumors to fundamental business changes. However, for long-term investors, fundamental facts typically hold more weight.
Revisions to Earnings Estimates
At Zacks, the primary focus is on evaluating changes in a company’s earnings projections. The fair value of a stock is determined by the present value of its future earnings stream. When sell-side analysts revise their earnings estimates to reflect the latest business trends, the fair value of the stock adjusts accordingly. If the fair value is higher than the current market price, investors tend to buy, pushing the stock price upward.
For the current quarter, Novavax is expected to post earnings of $1.13 per share, indicating a significant change of +94.8% from the year-ago quarter. The Zacks Consensus Estimate has changed by +544.9% over the last 30 days.
For the current fiscal year, the consensus earnings estimate of $0.49 points to a change of +109.1% from the prior year, with the estimate changing by +232.9% over the last 30 days.
For the next fiscal year, the consensus earnings estimate of $0.51 indicates a change of +4.4% from what Novavax is expected to report this year. Over the past month, this estimate has changed by +53.5%.
With an impressive externally audited track record, Zacks’ proprietary stock rating tool—the Zacks Rank—is a more conclusive indicator of a stock’s near-term price performance. It effectively harnesses the power of earnings estimate revisions. Due to the recent changes in consensus estimates and three other factors related to earnings estimates, Novavax currently holds a Zacks Rank #3 (Hold).
Projected Revenue Growth
While earnings growth is a crucial indicator of financial health, sustainable revenue growth is equally important. Novavax’s consensus sales estimate for the current quarter is $429.83 million, reflecting a year-over-year change of +1.3%. For the current and next fiscal years, the estimates are $999.14 million (+1.6%) and $553.03 million (-44.7%), respectively.
Last Reported Results and Surprise History
Novavax reported revenues of $93.86 million in the last quarter, representing a year-over-year change of +16%. The EPS for the same period was -$1.05, compared to -$3.41 a year ago. These results were below the Zacks Consensus Estimate of $101.24 million, a revenue surprise of -7.3%, and an EPS surprise of -0.96%. Over the last four quarters, Novavax has surpassed consensus EPS estimates twice and revenue estimates twice.
Valuation
Determining whether a stock’s current price reflects its intrinsic value and growth prospects is crucial. Zacks’ Value Style Score system grades stocks on a scale from A to F, evaluating traditional and unconventional valuation metrics. Novavax is graded D, indicating it is trading at a premium to its peers. More details on the valuation metrics driving this grade can be found here.
Bottom Line
The discussed factors, along with additional information on Zacks.com, can help determine whether it’s worthwhile to pay attention to the market buzz about Novavax. However, its Zacks Rank #3 (Hold) suggests it may perform in line with the broader market in the near term.
