Should you buy Moderna stock?
- 4 months ago
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With 17 billion dollars in cash and investments, vaccine pioneer Moderna has a current enterprise value around 57 billion dollars.
Revenue over the last 12 months was 21.4 billion and net income was 11.8 billion.
That means the company is valued around 2.7 times revenue or 6.2 times earnings.
That sounds cheap but Moderna’s revenue is forecast to fall significantly over the next few years as demand for its COVID-19 vaccine declines.
According to Standard and Poors revenue should fall to 8 billion by 2025 and net income to around 2.5 billion. That means right now Moderna is valued at 30 times 2025 earnings.
But, Moderna has lots of cash and the endemic COVID market is expected to be larger than the flu. Annual COVID vaccines should provide the company with a steady flow of revenue for years to come.
More importantly, a few weeks ago Moderna published results of its skin cancer vaccine, which, combined with immunotherapy, cut the risk of recurrence or death in high risk patients by 44%.
According to the Financial Times, a late stage melanoma vaccine, if successful, could add 5 billion dollars to Moderna’s top line revenue.
Assuming similar margins, that could get net income back up to roughly 5 billion by 2026 and that brings the valuation down to 15 times 2026 earnings.
Of course, that’s a big assumption and the vaccine still has to get through the next phase of trials. But Moderna’s MRNA technology has now proven its worth and the company does have a large pipeline filled with potential.
#stocks #investing #stockstobuy #modernastock #overlookedalpha
With 17 billion dollars in cash and investments, vaccine pioneer Moderna has a current enterprise value around 57 billion dollars.
Revenue over the last 12 months was 21.4 billion and net income was 11.8 billion.
That means the company is valued around 2.7 times revenue or 6.2 times earnings.
That sounds cheap but Moderna’s revenue is forecast to fall significantly over the next few years as demand for its COVID-19 vaccine declines.
According to Standard and Poors revenue should fall to 8 billion by 2025 and net income to around 2.5 billion. That means right now Moderna is valued at 30 times 2025 earnings.
But, Moderna has lots of cash and the endemic COVID market is expected to be larger than the flu. Annual COVID vaccines should provide the company with a steady flow of revenue for years to come.
More importantly, a few weeks ago Moderna published results of its skin cancer vaccine, which, combined with immunotherapy, cut the risk of recurrence or death in high risk patients by 44%.
According to the Financial Times, a late stage melanoma vaccine, if successful, could add 5 billion dollars to Moderna’s top line revenue.
Assuming similar margins, that could get net income back up to roughly 5 billion by 2026 and that brings the valuation down to 15 times 2026 earnings.
Of course, that’s a big assumption and the vaccine still has to get through the next phase of trials. But Moderna’s MRNA technology has now proven its worth and the company does have a large pipeline filled with potential.
#stocks #investing #stockstobuy #modernastock #overlookedalpha