Novavax, Inc. (NASDAQ:NVAX) Just Reported, And Analysts Assigned A US$16.67 Price Target

Novavax, Inc. (NASDAQ:NVAX) defied analyst predictions to release its third-quarter results, which were ahead of market expectations. The overall earnings picture was okay, with revenues of US$85m beating expectations by 15%. Statutory losses were US$0.76 per share, only marginally better than what the analysts had forecast. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Novavax after the latest results.

View our latest analysis for Novavax

Following the recent earnings report, the consensus from six analysts covering Novavax is for revenues of US$557.9m in 2025. This implies a disturbing 37% decline in revenue compared to the last 12 months. Earnings are expected to improve, with Novavax forecast to report a statutory profit of US$0.096 per share. Before this latest report, the consensus had been expecting revenues of US$545.9m and US$0.18 per share in losses. So we can see there's been a pretty clear upgrade to expectations following the latest results, with a modest lift to revenues expected to lead to profitability earlier than previously forecast.

As a result, it might be a surprise to see thatthe analysts have cut their price target 6.5% to US$16.67, which could suggest the forecast improvement in performance is not expected to last. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Novavax analyst has a price target of US$26.00 per share, while the most pessimistic values it at US$9.00. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how analysts think this business will perform. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Novavax's past performance and to peers in the same industry. We would highlight that revenue is expected to reverse, with a forecast 31% annualised decline to the end of 2025. That is a notable change from historical growth of 27% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 22% annually for the foreseeable future. It's pretty clear that Novavax's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts now expect Novavax to become profitable next year, compared to previous expectations that it would report a loss. Fortunately, they also upgraded their revenue estimates, although our data indicates it is expected to perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Novavax going out to 2026, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 3 warning signs for Novavax (1 is a bit unpleasant!) that you should be aware of.

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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.