Moderna stocks continued to hit record highs on several pieces of bullish vaccine news in August and when it entered the S&P 500, replacing AstraZeneca (AZNO) buy out Alexion Pharmaceuticals.
Reports suggested Modern (MRNA) and fellow Covid vaccine makers Pfizer (PFE) and BioNTech (BNTX) had raised the prices for their shots. Further, the Food and Drug Administration is reportedly under pressure to fully approve the shots. Meanwhile, Germany and other European countries are planning to offer booster shots, according to the New York Times.
Recently, a committee of experts recommended that the European Union allow Moderna’s Covid vaccine for emergencies in teens aged 12-17. Moderna has entered into supply agreements with officials in Taiwan, Japan and Argentina.
The company also recently dosed the first participant in a trial of its seasonal flu vaccine and its Covid shot received emergency clearance in India. In recent tests, Moderna pitted the blood of vaccinated people against Covid variants. The blood made antibodies against a number of variants, including the delta variant that was first found in India.
In late June, the Food and Drug Administration warned of an increased risk of heart inflammation in recipients of Moderna’s messenger RNA vaccines Pfizer (PFE)/BioNTech (BNTX). European officials also added a warning to the label detailing the potential side effect.
Moderna has asked regulators in the US, Canada and Switzerland to approve its Covid vaccine for teens. It is also actively filing information with the FDA in hopes of getting full approval.
So, all in all, is Moderna stock a buy today?
A Fundamental Look at Moderna Stocks
The biotech company relies on its messenger RNA or mRNA technology. Messenger RNA is a substance in the body that provides the instructions for making proteins.
So-called spike proteins cover the type of coronavirus that causes Covid-19. Moderna’s vaccine contains mRNA that tells the body to produce a structure similar to the spike protein. The idea is that this triggers the immune system to make disease-fighting antibodies and T cells.
Moderna just reported its first quarter of profitability. In the first quarter, Moderna made $2.84 per share, minus some items, on $1.94 billion in revenue. The latest number included $1.73 billion in sales of its Covid vaccine. Profits exceeded forecasts, but turnover lagged behind.
Revenue growth has been massive and earnings are bullish, although it is still in its infancy. CAN SLIM investors are encouraged to look for stocks with recent quarterly revenue and earnings growth of 20%-25%. The bigger that growth, the better.
In the second quarter, analysts polled by FactSet expect Moderna to earn $5.96 per share on revenue of $4.21 billion. Profits would change from losses from a year earlier and sales would grow at a four-digit percentage.
Moderna stocks have a Composite Rating of 74 out of the best 99 possible. The Composite Rating is a 1-99 measure of a stock’s key fundamental and technical measures. So MRNA stocks are below the top quartile of all stocks on those metrics.
What does 2020 say about MRNA stocks?
The Moderna share went public at the end of 2018 at 11 p.m.
In 2019, the biotech stock shot up about 38%. In 2020, however, stocks shot up more than 434%.
Still, the bullish Moderna stock action doesn’t extend to fundamental measures. In 2020, Moderna reported a loss of $1.96 per share on revenue of $803 million. Turnover increased, but losses increased.
In 2021, analysts expect Moderna to earn $26.17 per share on revenue of $18.77 billion. Profits would fluctuate from a year ago’s losses and sales would increase by a four-digit percentage.
Moderna Stock: Technical Analysis
Moderna stocks rose above a gain-taking zone after breaking a head-and-handle base on June 30. Investors are encouraged to take profits when a stock is 20%-25% above its entry. Stocks are now well outside their profit-taking zone and are not currently establishing a new base.
Moderna shares held above the 50 and 200 day moving averages on Aug. 3, MarketSmith.com shows.
Stocks also have a perfect Relative Strength Rating of 99 out of the best 99 possible. The RS Rating is a 1-99 measure of a stock’s 12-month performance. This places Moderna stock in the top 1% of all stocks on that stat.
But MRNA stocks have a poor EPS rating of 33, an improvement but still a reflection of years of per-share losses.
Keep an eye on IBD Digital for more information on stock ratings.
Covid vaccine boosts shares
At the end of July, the EMA’s Committee for Medicinal Products for Human Use issued a positive opinion on Moderna’s Covid vaccine for teenagers.
Moderna also signed a supply agreement with Taiwan for 20 million doses of its Covid vaccine and possible variant-specific booster injection by 2022, and 15 million doses by 2023. It will also partner with Takeda Pharmaceutical (SO) and Japan to deliver another 50 million doses of the original injection and potential booster by 2022.
MRNA supplies also rose earlier in the month after it announced a supply deal with Argentina for 20 million doses of its Covid vaccine or its booster injection. The latter is not authorized. But delivery is expected in the first quarter.
Ultimately, Moderna’s Covid vaccine was 94.1% effective. Earlier this year, the Centers for Disease Control and Prevention said a test by U.S. health professionals showed Pfizer and Moderna vaccines are 80% effective after the first dose. The second dose increases effectiveness to 90%.
In an early phase of testing, the potential Covid booster injection produced neutralizing antibodies to variants known as Beta, Kappa, Delta and Eta, as well as variants first identified in Uganda and Angola.
Earlier this year, the FDA allowed the storage of Moderna’s vaccine at room temperature for 24 hours. The agency considers a perforated vial usable for up to 12 hours, as opposed to previous guidance for six hours. Workers can also get 15 doses from two vials, up from 11 before.
Moderna has also announced a long-term supply deal for the shot with a coalition of low-income countries. It will deliver 34 million doses this year and 466 million doses by 2022.
So, is Moderna Stock a sale now?
Moderna shares are currently not for sale. Stocks now extend bullishly from their buy zone and recently topped a gain-taking zone. CAN SLIM investors are advised to buy a stock when it has cleared a buy point and is within the 5% chase zone.
The company has managed to achieve strong revenue growth. Analysts expect this to continue in the future. Furthermore, they see it firmly profitable for the foreseeable future. But analysts are calling for a slowdown in both metrics in 2022.
Stocks have a strong RS rating, but the company’s Composite Rating is not among the top of the stock.
It will be important to keep an eye on Moderna’s efforts to distribute its coronavirus vaccine. That could boost both the MRNA stock and the biotech company’s financials.
Check out IBD stock lists to find the best stocks to buy and watch. Be sure to also keep track of stocks you want to buy or sell.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
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