NVAX Stock Rises Overnight Ahead Of Q4 Print With Pfizer Tailwinds — Analyst Warns Of 20% Crash

Koyfin analysts expect revenue to grow nearly 28% from the last quarter and forecast losses to narrow significantly.

• TD Cowen and BofA both raised price targets following the Pfizer partnership but the latter maintained a cautious stance.
• The Matrix-M agreement brought a $30 million upfront payment and potential $500 million in milestones.
• Activist pressure from Shah Capital continues to be an overhang, with the investor pushing for strategic alternatives.

Novavax, Inc. (NVAX) shares rose nearly 2% overnight ahead of the company’s fourth-quarter (Q4) earnings due Thursday, as fresh Pfizer partnership tailwinds lifted sentiment, even as analysts warned the stock could face downside.

NVAX stock climbed 0.7% in Monday’s regular session to $9.53 and added another 0.8% in after-hours trading. 

Pfizer Deal Shapes Analyst Views

TD Cowen raised its price target on Novavax to $8 from $7, implying a 16% downside from current levels, while maintaining a 'Hold' rating. The brokerage incorporated Sanofi’s reported Q4 Nuvaxovid sales of 9 million euros ($10.6 million) and the company’s Matrix-M licensing deal with Pfizer, which includes high mid-single-digit (MSD) royalty payments, into its outlook.

Last month, Bank of America Securities (BofA) also raised its price target to $7 from $6 following the Pfizer partnership announcement, but reiterated an 'Underperform' rating. “While the firm thinks the agreement is a positive sign for interest in the technology and the upfront cash is a plus, it sees the cadence of development as an outstanding question,” BofA said.

Novavax entered into a non-exclusive licensing agreement with Pfizer last month for its Matrix-M adjuvant to be used in vaccine products across up to two disease areas. Under the deal, Novavax received a $30 million upfront payment and is eligible for up to $500 million in development and sales milestones, along with tiered, high mid-single-digit royalty payments on Pfizer products that incorporate Matrix-M. Pfizer will lead development and commercialization, while Novavax will supply the adjuvant.

Wall Street Expects NVAX Q4 Losses To Narrow

According to Koyfin data, analyst price targets for Novavax range from $6 to $25, with a 12-month average target of $13. This suggests a potential upside of about 36% from the stock’s last close. Analysts have also assigned a greater upside to Novavax than to rival Moderna, based on consensus price targets.

Consensus ratings lean toward 'Buy', with five analysts assigning a 'Buy' rating, one a 'Hold', one a 'Sell', and two a 'Strong Sell', based on coverage from nine analysts.

Koyfin estimates project revenue at $89.86 million, up from $70.44 million in the previous quarter, representing nearly 28% growth. Meanwhile, losses are expected to narrow significantly. Earnings before interest, tax, depreciation, and amortization (EBITDA) are projected at a loss of $69.59 million compared with a loss of $171.43 million last quarter. 

Earnings before interest and taxes (EBIT) are forecast at a loss of $70.74 million versus a loss of $178.02 million earlier. GAAP loss per share (EPS) is expected at $0.49 compared with a loss of $1.25 in the last quarter.

Activist Push Raises Governance Pressure

Sentiment toward Novavax has also turned more cautious after activist investor Shah Capital intensified pressure on the company late last year. In November, the fund, Novavax’s second-largest shareholder, warned it could pursue a proxy fight within four months if the board failed to act, while pushing for a review of strategic alternatives, including a potential sale. 

Shah Capital raised its stake to about 8.3% but flagged disappointment with the commercial performance of the company’s Covid-19 vaccine, citing a sharp gap in seasonal uptake versus competitors. The fund said it remained supportive of the underlying science but questioned execution, urging the board to appoint an investment bank to evaluate options.

How Did Stocktwits Users React?

On Stocktwits, retail sentiment for NVAX was ‘bearish’ amid ‘normal’ message volume.

One bullish user expressed optimism, noting “The specific disease areas Pfizer has selected for Matrix-M remain undisclosed, though  the first field has already been chosen with an option to designate a second.”

Another user pointed to a rivalry between Merck and Bristol Myers Squibb, suggesting that Novavax’s Matrix-M could create a “competitive advantage” with differentiation.

NVAX stock has jumped 42% year to date.

For updates and corrections, email newsroom[at]stocktwits[dot]com.<