Yahoo Finance This Just In: Analysts Are Boosting Their Novavax, Inc. (NASDAQ:NVAX) Outlook for This Year
Shareholders in Novavax, Inc. (NASDAQ:NVAX) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with the analysts modelling a real improvement in business performance. The market seems to be pricing in some improvement in the business too, with the stock up 9.6% over the past week, closing at US$8.45. It will be interesting to see if this latest upgrade is enough to kickstart further buying interest in the stock.
Following this upgrade, Novavax's six analysts are forecasting 2023 revenues to be US$1.3b, approximately in line with the last 12 months. Losses are predicted to fall substantially, shrinking 82% to US$2.44. However, before this estimates update, the consensus had been expecting revenues of US$832m and US$5.85 per share in losses. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a sizeable increase to their revenue forecasts while also reducing the estimated loss as the business grows towards breakeven.
Check out our latest analysis for Novavax
The consensus price target fell 42%, to US$22.83, suggesting that the analysts remain pessimistic on the company, despite the improved earnings and revenue outlook. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Novavax analyst has a price target of US$41.00 per share, while the most pessimistic values it at US$9.00. With such a wide range in price targets, the analysts are almost certainly betting on widely diverse outcomes for the underlying business. As a result it might not be possible to derive much meaning from the consensus price target, which is after all just an average of this wide range of estimates.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 1.9% by the end of 2023. This indicates a significant reduction from annual growth of 64% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 19% per year. 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 here is that analysts reduced their loss per share estimates for this year, reflecting increased optimism around Novavax's prospects. Fortunately, they also upgraded their revenue estimates, and are forecasting revenues to grow slower than the wider market. A lower price target is not intuitively what we would expect from a company whose business prospects are improving - at least judging by these forecasts - but if the underlying fundamentals are strong, Novavax could be one for the watch list.
Analysts are definitely bullish on Novavax, but no company is perfect. Indeed, you should know that there are several potential concerns to be aware of, including dilutive stock issuance over the past year. For more information, you can click through to our platform to learn more about this and the 1 other warning sign we've identified .
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.
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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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