It has been about a month since the last earnings report for Novavax (NVAX). Shares have added about 13.6% 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 drivers.
Q3 Earnings & Sales Beat Estimates
Novavax incurred a third-quarter 2024 loss of 76 cents per share, narrower than the Zacks Consensus Estimate of a loss of 87 cents. In the year-ago quarter, the company reported a loss of $1.26 per share.
Revenues in the quarter amounted to $85 million, which beat the Zacks Consensus Estimate of $57 million. However, the top line declined 55% on a year-over-year basis.
Quarter in Detail
Novavax recorded $38.2 million in product sales compared with $2.2 million in the year-ago quarter. This upside was primarily driven by sales of the company’s protein-based COVID-19 vaccine, also the company’s sole marketed product in the United States.
While the reported figure beat our model estimates of $23 million, it missed the Zacks Consensus Estimate of $49 million.
Licensing, royalties and other revenues rose 133% year over year to $46.3 million in the quarter, driven by a combination of activities as part of the recently signed agreement with Sanofi for its protein-based COVID-19 vaccine and adjuvant sales.
Management did not record grant revenues during the quarter. The company reported about $165 million in grant revenues in the year-ago period.
In the reported quarter, research and development (R&D) expenses totaled $87 million, down 18% year over year. The downside was caused by a reduction in clinical and manufacturing spending during the quarter.
Selling, general and administrative (SG&A) expenses were down 34% year over year to $71 million, primarily due to management's restructuring activities to reduce costs.
As of Sept. 30, 2024, the company had $924 million of cash and cash equivalents compared with $1.1 billion as of June 30, 2024.
2024 Guidance
For 2024
Novavax expects 2024 total revenues to be in the range of $650-$700 million, down from its previously issued guidance of $700-$800 million. This was likely due to lower COVID-19 vaccine uptake in ex-U.S. markets.
This revised guidance includes nearly $475 million in licensing, royalties and other revenues. This includes $450 million of revenue recognition associated with the $500 million upfront payment from the Sanofi agreement and the rest in royalty and other revenues from partner-related activities.
It expects full-year product revenue of $175-$225 million, down from the earlier projection of $275-$375 million.
The company has maintained its projection for full-year combined R&D and SG&A expenses in the band of $700-$750 million.
Beyond 2024
Management has maintained its guidance on combined R&D and SG&A expenses for full-year 2025 and 2026. It expects the combined expenses to be nearly $500 million for 2025 and around $350 million for 2026. It also anticipates a portion of the costs of both these years to be reimbursed by Sanofi.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -416.92% 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. Notably, Novavax has a Zacks Rank #3 (Hold). We expect an in-line 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, Qiagen (QGEN), has gained 8.3% over the past month. More than a month has passed since the company reported results for the quarter ended September 2024.
Qiagen reported revenues of $501.87 million in the last reported quarter, representing a year-over-year change of +5.5%. EPS of $0.57 for the same period compares with $0.52 a year ago.
Qiagen is expected to post earnings of $0.60 per share for the current quarter, representing a year-over-year change of +9.1%. Over the last 30 days, the Zacks Consensus Estimate has changed +0.6%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Qiagen. Also, the stock has a VGM Score of B.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
