tiprankstipranks
Moderna Wins on Vaccine Sales
Stock Analysis & Ideas

Moderna Wins on Vaccine Sales

The arrival of a COVID-19 vaccine was seen as a godsend by many. The companies that produced such an item, like drugmaker Moderna (MRNA), would be able to effectively write their own tickets. That’s just about what happened, as Moderna released its latest earnings report, and sent its stock climbing 8.2% in premarket trading on Wednesday.

I’m pulling back to neutral on Moderna. There are certainly reasons to buy in, but there are also reasons to stay out, especially given the company’s overall product line and its impact worldwide.

The last year for Moderna shares has proven one big reason it may be worth getting in. Last year at this time, the company began a massive run-up that saw share prices better than double in the space of two and a half months.

Late September brought the beginning of a long-term crash. The company lost over half its new value, and ended up below the prices seen this time last year.

The latest news gave Moderna shares a little extra push. The company posted its earnings report and destroyed analyst projections. It posted $8.58 per share in earnings against a FactSet estimate that called for $5.37. Revenue came in at $6.07 billion against $4.2 billion projected.

Wall Street’s Take

Turning to Wall Street, Moderna has a Moderate Buy consensus rating. That’s based on five Buys, five Holds, and one Sell assigned in the past three months. The average Moderna price target of $272.88 implies 86.1% upside potential.

Analyst price targets range from a low of $155 per share to a high of $506 per share.

Investor Sentiment is Mixed

It’s not every day you see a stock that has such an even split between buy and hold, even with that one outlier calling for a sale. But the rest of investor sentiment will prove almost as mixed as what the analysts think.

First, word from the TipRanks 13-F Tracker reveals that hedge funds are continuing their run for the exits. After a loss between June and September 2021, hedge funds continued to pull out between September and December as well.

While the numbers have seen some recovery, the overall pattern has declined. None of the numbers seen since September 2020 are a match for the highs seen back in March 2020.

Meanwhile, insider trading at Moderna is a firestorm of sell orders. In the last three months, sell transactions led buy transactions 28 to nine. That would be bad enough by itself, until you consider the last year. That’s when sell transactions led buy transactions 174 to 11.

Retail investors, at least those with portfolios on TipRanks, proved somewhat more bullish. In the last seven days, portfolios with Moderna increased less than 0.1%. In the last 30 days, however, portfolios with Moderna increased 1%.

Encore?

Moderna’s big problem right now is its product lineup.

Certainly, its sales of COVID-19 vaccines have been winners. However, take a look at the Moderna product pipeline. The first eight entries are all COVID-19 related. The next five are related to the flu. You have to go down three categories to find a product category that doesn’t have the word “COVID” in it.

What happens to Moderna’s sales if COVID-19 starts to drop off? We’re already seeing it to some extent. Large numbers of people are already vaccinated. Medical professionals are already skeptical about the impact of a fourth dose of COVID-19 vaccine. Those who want the vaccine pretty much already have it.

What will this do to sales going forward? Nothing good, in all likelihood. Worse, Moderna doesn’t seem to have a lot waiting in the wings to step up and keep that level of sales going.

Concluding Views

There are some things to like about Moderna.

However, much of Moderna’s non-COVID-19 pipeline looks sparse. Many of the other drugs are in early stages of development. If Moderna loses the COVID-19 sales before it can bring the other drugs to market, that’s likely to produce a significant cash shortfall.

That’s why I’m neutral on Moderna.

Discover new investment ideas with data you can trust

Read full Disclaimer & Disclosure

Trending

Name
Price
Price Change
S&P 500
Dow Jones
Nasdaq 100
Bitcoin

Popular Articles