A month has gone by since the last earnings report for Novavax (NVAX Quick QuoteNVAX - Free Report) . Shares have lost about 29.2% 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 Q2 Earnings and Sales Fall Short of Estimates

Novavax incurred a loss of $6.53 per share for second-quarter 2022, which missed the Zacks Consensus Estimate of earnings of $5.51. In the year-ago quarter, the company had posted a loss of $4.75 per share.

Revenues for the quarter were $185.9 million, down 37.6% year over year. Revenues missed the Zacks Consensus Estimate of $1.04 billion.

Quarter in Detail

During the second quarter, NVAX generated $55.5 million in product sales from NVX-CoV2373, its protein-based COVID-19 vaccine. In the year-ago quarter, the company did not record any product sales. Sequentially, sales plunged 90.5% quarter over quarter. The significant decline was on account of timing issues with regard to shipments for the COVID vaccine doses to Europe and challenges being faced by the COVAX facility in supplying COVID-19 vaccine doses to low and middle-income countries.

NVAX recorded $22.7 million of revenues from royalties and adjuvant sales to license partners.

Novavax’s grant revenues declined 60.4% year over year to $107.8 million for the same period as it materially completed the activities required under the agreements with the U.S. Government.

In the reported quarter, research and development expenses were $289.6 million, down 49.2% year over year. This decline was attributable to lower clinical development activities for NVX-CoV2373 as well as lower manufacturing costs for the vaccine incurred during the quarter.

Selling, general and administrative expenses rose 47.8% year over year to $108.2 million. The rise in expenses was on account of activities to support the commercial launch of NVX-CoV2373.

As of Jun 30, 2022, Novavax had $1.4 billion of cash and cash equivalents compared with $1.6 billion as of Mar 31, 2022.

2022 Guidance Lowered

Novavax lowered its total revenue guidance for the full year. It now expects to record total revenues between $2 billion and $2.3 billion, down from the previously-expected guidance of $4 billion and $5 billion. Per management, the updated guidance accounts for the changing market dynamics, i.e., change in expectations from both the U.S. market and COVAX facility, which the company considers as two major markets for its COVID vaccine. Management does not expect to record any new revenues from these two markets for the remainder of the year.

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 -23.48% due to these changes.

VGM Scores

Currently, Novavax has a poor Growth Score of F, a grade with the same score on the momentum front. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. 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.