Vaccine specialist Moderna (MRNA) reported its fiscal Q3 2020 financial results Thursday morning. Let’s run down the basic financial news first, and turn to the vaccine that everyone really wants to hear about:
Q3 was kind of a weird quarter for Moderna from a financial perspective. On the one hand, an explosion in grant revenue tied to the COVID-19 pandemic sent revenues soaring 830% to $157.9 million. On the other hand, though, expenses soared as well — up 166% to $393 million.
And because $393 million is more than $157.9 million Moderna lost money.
A lot of money.
$0.59 per share to be precise — 59% more than it lost in Q3 2019, before all the coronavirus business rolled in. What’s more, that per-share loss would have been even higher, but for the fact that Moderna grew its share count 19%, dispersing its per-share losses over more shares outstanding overall.
On the plus side, Moderna has raked in $1.2 billion in customer deposits so far this year for its mRNA-1273 coronavirus vaccine, and free cash is flowing in with $718.5 million. By the end of the quarter, Moderna had amassed a cash warchest bursting with $4 billion, and no debt to speak of.
And now, the main event: Coronavirus.
Moderna confirmed that it has fully enrolled its Phase 3 cllinical trial of mRNA-1273 with 30,000 patients participating.
Initial data on mRNA-1273’s effectiveness is “positive,” said management, and the vaccine is proving to be “well-tolerated across all age groups and induc[ing] rapid and strong immune responses against SARS-CoV-2.” The company is expecting to be able to release “1st interim” data on the trial in November if the vaccine proves to be at least 75% effective. In fact, at that level of effectiveness, a second round of data could arrive as early as December, or perhaps January.
After participating in a conference call post-earnings, Needham analyst Alan Carr observed that there’s a possibility the FDA could grant Moderna Emergency Use Authorization to begin distributing mRNA-1273 around this time — December 2020. By that point, Moderna says it will have produced 20 million doses of the vaccine, which can immediately begin being distributed. Still, Carr thinks it prudent not to count on any revenues being recognized from mRNA-1273 sales this year, pushing that prospect off into 2021 instead — but predicting sales will reach $2 billion in 2021.
What does this mean for the stock? In Carr’s opinion, notwithstanding how much revenue Moderna receives from mRNA-1273, or how quickly (or how profitably), “COVID-19 vaccine news [alone will suffice to] drive the stock into 2021,” and even after that, the analyst sees “substantial long-term value in the stock,” which he rates “buy” with a $94 price target. (To watch Carr’s track record, click here)
In contrast, J.P. Morgan analyst Cory Kasimov, despite agreeing basically line by line with Carr’s analysis on the timeline — and holding an $89 price target not that’s not that much lower than Carr’s — says he still feels it’s necessary to remain “cautious” on Moderna stock in the near term, and assigns the stock a rating of only “neutral.” (To watch Kasimov’s track record, click here)
Where does the rest of the Street side on this vaccine maker? It appears mostly bullish, as TipRanks analytics demonstrate MRNA as a Buy. Out of 11 analysts tracked in the last 3 months, 9 are bullish on the stock while 1 remains sidelined and 1 is bearish. With a return potential of nearly 46%, the stock’s consensus target price stands at $98.60. (See MRNA stock analysis on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
