With the business potentially at an important milestone, we thought we'd take a closer look at Novavax, Inc.'s (NASDAQ:NVAX) future prospects. Novavax, Inc., a biotechnology company, that promotes improved health by discovering, developing, and commercializing vaccines to protect against serious infectious diseases. With the latest financial year loss of US$545m and a trailing-twelve-month loss of US$285m, the US$1.4b market-cap company alleviated its loss by moving closer towards its target of breakeven. As path to profitability is the topic on Novavax's investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

View our latest analysis for Novavax

According to the 6 industry analysts covering Novavax, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2024, before generating positive profits of US$82m in 2025. The company is therefore projected to breakeven around 12 months from now or less. How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 51% year-on-year, on average, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Given this is a high-level overview, we won’t go into details of Novavax's upcoming projects, but, bear in mind that by and large biotechs, depending on the stage of product development, have irregular periods of cash flow. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.

Before we wrap up, there’s one issue worth mentioning. Novavax currently has negative equity on its balance sheet. This can sometimes arise from accounting methods used to deal with accumulated losses from prior years, which are viewed as liabilities carried forward until it cancels out in the future. These losses tend to occur only on paper, however, in other cases it can be forewarning.

Next Steps:

This article is not intended to be a comprehensive analysis on Novavax, so if you are interested in understanding the company at a deeper level, take a look at Novavax's company page on Simply Wall St. We've also compiled a list of essential aspects you should look at:

1. Valuation: What is Novavax worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Novavax is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Novavax’s board and the CEO’s background.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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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.