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Why Is Novavax (NVAX) Down 42.9% Since Last Earnings Report?

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A month has gone by since the last earnings report for Novavax (NVAX - Free Report) . Shares have lost about 42.9% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Novavax due for a breakout? 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 Earnings Beat in Q2, Sales Lag Estimates

Novavax recorded second-quarter 2020 loss per share of 30 cents, narrower than the Zacks Consensus Estimate of a loss of 57 cents and also the year ago quarter’s loss of $1.69.

Revenues in the quarter were $36 million, reflecting a significant increase year over year owing to the CEPI’s funding related to the clinical development of NVX-CoV2373. However, the top line missed the Zacks Consensus Estimate of $46 million.

Revenues for the three months ended Jun 30, 2020 included revenues under the CEPI grant. The company expects revenues to significantly rise in 2020 owing to its NVX-CoV2373 program, which will be primarily funded by CEPI and other potential non-dilutive funding sources, namely the department of defense and US government under Operation Warp Speed

Quarter in Detail

In the reported quarter, research and development expenses were $34.8 million, up 15% from the year-ago figure due to higher costs for the development of NVX-CoV2373.

General and administrative expenses rose 84% to $17.7 million due to higher professional fees and employee-related expenses

As of Jun 30, 2020, Novavax had cash, cash equivalents, marketable securities and restricted cash worth $609.5 million compared with $244.7 million as of Mar 31, 2020.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates review. The consensus estimate has shifted -10.51% due to these changes.

VGM Scores

Currently, Novavax has a strong Growth Score of A, a grade with the same score on the momentum front. However, 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 A. 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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