Breakeven Is Near for Novavax, Inc. (NASDAQ:NVAX)

With the business potentially at an important milestone, we thought we'd take a closer look at Novavax, Inc.'s (NASDAQ:NVAX) future prospects. Novavax, Inc., a biotechnology company, that promotes improved health by discovering, developing, and commercializing vaccines to protect against serious infectious diseases. The US$1.2b market-cap company posted a loss in its most recent financial year of US$545m and a latest trailing-twelve-month loss of US$285m shrinking the gap between loss and breakeven. Many investors are wondering about the rate at which Novavax will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.

Check out our latest analysis for Novavax

Novavax is bordering on breakeven, according to the 6 American Biotechs analysts. They expect the company to post a final loss in 2024, before turning a profit of US$92m in 2025. Therefore, the company is expected to breakeven roughly 12 months from now or less. At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 52%, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Given this is a high-level overview, we won’t go into details of Novavax's upcoming projects, though, keep in mind that by and large biotechs, depending on the stage of product development, have irregular periods of cash flow. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.

One thing we would like to bring into light with Novavax is it currently has negative equity on its balance sheet. Accounting methods used to deal with losses accumulated over time can cause this to occur. This is because liabilities are carried forward into the future until it cancels. These losses tend to occur only on paper, however, in other cases it can be forewarning.

Next Steps:

This article is not intended to be a comprehensive analysis on Novavax, so if you are interested in understanding the company at a deeper level, take a look at Novavax's company page on Simply Wall St. We've also put together a list of relevant aspects you should look at:

1. Valuation: What is Novavax worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Novavax is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Novavax’s board and the CEO’s background.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.