Novavax (NASDAQ:NVAX) Gains on Q3 Beat
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Novavax (NASDAQ:NVAX) Gains on Q3 Beat

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Novavax has delivered a better-than-expected third-quarter performance while maintaining a focus on improving its cost structure.

Novavax (NASDAQ:NVAX) shares are trending marginally higher today after the vaccine maker announced a better-than-anticipated third-quarter performance. Despite a 74.5% year-over-year decline, revenue of $187 million fared better than estimates by nearly $16 million. Importantly, EPS of -$1.26 came in narrower than expectations by $0.54.

The company notched $165 million in grant revenue associated with U.S. market preparedness and progress on clinical projects and $12 million in Matrix-M sales to a collaboration partner.

Novavax’s management emphasized the company’s focus on optimizing costs. Its cost of sales declined to $99 million from $435 million a year ago, and research and development expenses dropped to $106 million from $304 million in the year-ago period. Thus, the company had a cash pile of $666 million at the end of the quarter and is looking to initiate an additional cost reduction program with an aim to lower its expenses by more than $300 million in 2024.

Despite these lowered expenses, Novavax continues to drive its product pipeline. The company expects to begin a Phase 3 trial for its COVID-19-Influenza combination vaccine in 2024, with an anticipated launch in 2026. Additionally, it has delivered an updated COVID-19 vaccine for the upcoming 2023 Fall vaccination season and expects a demand of between 30 to 50 million doses for the 2023-24 season.

Looking ahead to Fiscal 2023, Novavax expects total revenue to be in the range of $900 million to $1,100 million, compared to the prior outlook of between $1,300 million and $1,500 million. For the first quarter of Fiscal year 2024, revenue is pegged at $300 million.

What Is the Forecast for NVAX Stock?

Overall, the Street has a Moderate Buy consensus rating on Novavax. The average NVAX price target of $18.33 points to a mega 169.6% potential upside in the stock.

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