Novavax (NVAX) is back in focus after the company signed a non exclusive License and Option Agreement with Pfizer, giving Pfizer access to its Matrix M adjuvant for vaccines targeting up to two infectious diseases.

The Pfizer agreement comes after a period of renewed interest in Novavax, with a 31.62% 1 month share price return and a 24.05% year to date share price return. However, the 5 year total shareholder return of a 96.95% loss shows that long term holders have experienced substantial value erosion.

If partnership news like this has your attention, it could be a good moment to widen your watchlist and check out healthcare stocks as potential additions.

With the Pfizer deal on the table, a recent 1 month gain of 31.62% and a long term 5 year loss near 97%, the central question is whether Novavax is still mispriced or if the market is already factoring in a potential recovery.

Most Popular Narrative: 32.5% Undervalued

Against Novavax's last close at $8.85, the most followed narrative points to a fair value of $13.11, putting the recent Pfizer news into a wider context.

The analysts have a consensus price target of $12.5 for Novavax based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $25.0, and the most bearish reporting a price target of just $6.0.

Curious what kind of earnings reset still supports that higher value. The narrative leans on shrinking revenues, thinner margins and a much richer future earnings multiple. Want to see how those moving parts fit together.

Result: Fair Value of $13.11 (UNDERVALUED)

However, this depends on partners reaching regulatory and commercial milestones, as well as on COVID vaccine demand not fading faster than analysts currently expect.

Build Your Own Novavax Narrative

If this view does not quite match your own or you prefer to test the assumptions yourself, you can build a custom narrative in just a few minutes using Do it your way.

A great starting point for your Novavax research is our analysis highlighting 3 key rewards and 3 important warning signs that could impact your investment decision.

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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.