Novavax (NVAX) Valuation in Focus After Sanofi Deal Unlocks Milestone Payments and Royalty Potential

Novavax (NVAX) has just completed the transfer of marketing authorization for its COVID-19 vaccine, Nuvaxovid, to Sanofi in the European Union. This move unlocks a $25 million milestone payment and deepens their collaboration. It also sets up Novavax for future milestone payments and royalties in the future.

See our latest analysis for Novavax.

Novavax’s recent $25 million milestone from the Sanofi deal arrives after a choppy ride for investors. Despite a sharp 25% share price return over the past 90 days, momentum is only just bouncing back. Shares remain far below last year, with total shareholder return down 32% over twelve months as the company continues to reset expectations around its longer-term prospects.

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With shares well below last year’s levels, but a solid milestone win and new royalty streams on the table, is Novavax now undervalued, or is the market already factoring in all future growth potential?

Most Popular Narrative: 31% Undervalued

Novavax's most widely-followed narrative sees fair value at $12.50, which is materially above the last close price of $8.62. A steep discount persists, fueling debate about the path forward for both growth and profitability.

Partnership with Sanofi has de-risked commercial execution for Nuvaxovid and opened doors for future milestone and royalty streams, particularly as Sanofi develops and commercializes COVID-influenza combination vaccines. This could meaningfully boost Novavax's recurring revenue and net margins.

Read the complete narrative.

Want a glimpse into the bold forecasts that anchor this premium? Analysts are betting on intense margin shifts, royalty windfalls, and a surprisingly aggressive future earnings multiple. The details challenge common industry logic. Can Novavax actually deliver on these ambitious bottom-line targets? Unpack the blueprint for this fair value leap inside the full narrative.

Result: Fair Value of $12.50 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, ongoing reliance on partner success and potential declines in COVID-19 vaccine demand could present challenges for Novavax in sustaining future growth and earnings.

Find out about the key risks to this Novavax narrative.

Another View: DCF Model Sends a Stark Signal

While the analyst consensus points to undervaluation, our DCF model tells a different story. Based on the SWS DCF model, Novavax appears significantly overvalued relative to its estimated fair value of $2.46. This raises the question: What if the market is pricing in far more optimism than the business can deliver?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Novavax for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Novavax Narrative

If you see the data differently or want to run your own numbers, you can build a personalized view in just a few minutes. Do it your way

A great starting point for your Novavax research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

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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.

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