Novavax (NASDAQ:NVAX) Surprises With Strong Q4 CY2025

Vaccine biotechnology company Novavax (NASDAQ:NVAX) reported Q4 CY2025 results beating Wall Street’s revenue expectations, with sales up 66.6% year on year to $147.1 million. Its GAAP profit of $0.11 per share was significantly above analysts’ consensus estimates.

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Company Overview

Pioneering a nanoparticle technology that mimics the molecular structure of disease pathogens, Novavax (NASDAQ:NVAX) develops and commercializes protein-based vaccines for infectious diseases, with a primary focus on its COVID-19 vaccine and combination respiratory vaccine candidates.

Revenue Growth

A company’s long-term sales performance can indicate its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Luckily, Novavax’s sales grew at an impressive 18.8% compounded annual growth rate over the last five years. Its growth beat the average healthcare company and shows its offerings resonate with customers.

Long-term growth is the most important, but within healthcare, a half-decade historical view may miss new innovations or demand cycles. Novavax’s recent performance shows its demand has slowed significantly as its annualized revenue growth of 6.9% over the last two years was well below its five-year trend.

This quarter, Novavax reported magnificent year-on-year revenue growth of 66.6%, and its $147.1 million of revenue beat Wall Street’s estimates by 57.4%.

Looking ahead, sell-side analysts expect revenue to decline by 55.6% over the next 12 months, a deceleration versus the last two years. This projection doesn't excite us and suggests its products and services will face some demand challenges.

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Operating Margin

Operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses – everything from the cost of goods sold to advertising and wages. It’s also useful for comparing profitability across companies with different levels of debt and tax rates because it excludes interest and taxes.

Although Novavax was profitable this quarter from an operational perspective, it’s generally struggled over a longer time period. Its expensive cost structure has contributed to an average operating margin of negative 45.5% over the last five years. Unprofitable healthcare companies require extra attention because they could get caught swimming naked when the tide goes out. It’s hard to trust that the business can endure a full cycle.

On the plus side, Novavax’s operating margin rose over the last five years, as its sales growth gave it operating leverage. Zooming in on its more recent performance, we can see the company’s trajectory is intact as its margin has also increased by 97.9 percentage points on a two-year basis.

In Q4, Novavax generated an operating margin profit margin of 9.7%, up 158.1 percentage points year on year. This increase was a welcome development and shows it was more efficient.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Novavax’s full-year EPS flipped from negative to positive over the last five years. This is encouraging and shows it’s at a critical moment in its life.

In Q4, Novavax reported EPS of $0.11, up from negative $0.51 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Novavax’s full-year EPS of $2.38 to shrink by 56%.

Key Takeaways from Novavax’s Q4 Results

It was good to see Novavax beat analysts’ EPS expectations this quarter. We were also excited its revenue outperformed Wall Street’s estimates by a wide margin. Zooming out, we think this quarter featured some important positives. The market seemed to be hoping for more, and the stock traded down 2.3% to $9.33 immediately after reporting.

Big picture, is Novavax a buy here and now? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here (it’s free).