Moderna Inc (NASDAQ:MRNA) is one of the big names in Covid-19 vaccines. Of course, that made it one of the big stock growth stories of 2020 as the hunt for a vaccine began. Investors who bought shares last March, when the company was a leading contender saw huge returns.
MRNA stock reached an all-time high of $189.26 in February, more than a 700% gain over the previous 12 months. But it’s slumped since then and is currently trading in the $130 range.
You might think that the time to invest in MRNA stock has passed. That would be a mistake. This is a stock with an “A” rating in Portfolio Grader. It wasn’t the first to hit the market with a Covid-19 vaccine, and it won’t be the last, but the demand for vaccines is massive.
And it will continue for years. Moderna has a massive order backlog to fulfill, however, when (or if) the global demand for Covid-19 vaccines is finally satisfied, Moderna has other irons in the fire as well — this company is far from a one-trick pony.
Countries are Lining Up to Buy Moderna’s Covid-19 Vaccine
On Dec. 18, 2020 Moderna’s became the second vaccine approved by the FDA for use in America. The orders have been piling up for the company ever since. As of the end of February, the tally included:
- The European Union: 310 million doses, with option to buy an additional 150 million in 2022
- United States: 300 million doses with the option to buy another 200 million
- Japan: 50 million doses
- Canada: 44 million doses
- Republic of Korea: 40 million doses
The list continues, but the point is Moderna will be able to sell every drop of vaccine it can manufacture. The company says it is boosting global manufacturing capacity with the target of 1 billion doses for 2021 and up to 1.4 billion doses in 2022.
The Financial Results of Vaccination
Having one of the world’s most popular Covid-19 vaccines is paying off in a big way for Moderna. The company reported fourth-quarter revenue of $571 million, up nearly 4,000% year-over-year. For full-year 2020, revenue of $803 million was up 1,238% over the $60 million reported for 2019.
Not surprisingly, the financial news kicked off a short rally for MRNA stock at the end of February.
That $803 million in revenue is a drop in the bucket. With the long list of orders for its vaccine, 2021 is going to be a huge year for the company. Moderna says the currently signed deals are expected to bring in a whopping $18.4 billion in revenue this year. That may increase with additional deals. It’s not just revenue — 2021 is also expected to push Moderna into profitability.
It’s not unreasonable to expect MRNA stock will at least recover to its February high before 2021 is out.
The biggest knock against Moderna’s Covid vaccine is that it requires storage and transportation at sub-zero temperatures. However, the company has a new version (mRNA-1283) that entered Phase-1 clinical trials on March 15. This next generation version of Moderna’s Covid-19 vaccine is refrigerator-stable. If successful, Moderna says it will:
” … facilitate easier distribution and administration in a wider range of settings, including potentially for developing countries.”
Bottom Line of MRNA Stock
Moderna has other products in development, including seasonal flu and HIV vaccines. Some of those bets are likely to pay off, and have the potential to be very lucrative. However, even if you only look at the company for its Covid-19 vaccine(s), the future looks promising for investors. It’s likely to take years to vaccinate the entire global population against Covid-19. The number of doses required dwarf the huge contracts already signed by Moderna.
MRNA stock is currently trading at roughly a 30% discount compared to its all-time high. Investment analysts are betting shares return to near that level over the next year. Those polled by CNN Money have an average 12-month price target of $182 for MRNA, just a smidge under that all-time high. Given everything we know about Moderna — especially the market for its Covid-19 vaccine(s) — that price target may very well turn out to be overly cautious.
— Louis Navellier and the InvestorPlace Research StaffAmerica's #1 Stock Picker: BUY "AMZN of Houses" [sponsor]
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Source: Investor Place