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Key Takeaways
- Analysts estimate adjusted EPS of -$0.22 vs. -$0.31 in Q4 FY 2019.
- Investors anticipate optimistic forward guidance for Q1 FY 2021 fueled by soaring COVID-19 vaccine sales.
- Revenue is expected to rise sharply in Q4 FY 2020.
Moderna Inc. (MRNA), the young biotechnology company focused on developing drugs and vaccines based on messenger RNA, has garnered major attention over the past year for its role in developing a vaccine against COVID-19. Until mRNA-1273, Moderna’s coronavirus vaccine, the company had never brought an approved medicine to market. Now, it’s about to make enormous profits from a vaccine for which millions of people worldwide are desperately waiting.
Investors will be watching how sales of mRNA-1273 bolster Moderna’s financial results when the company reports earnings on February 25, 2021 for Q4 FY 2020. Analysts expect Moderna to post another adjusted loss per share, albeit the smallest quarterly adjusted loss in at least three and a half years, a period when it’s never made a profit. Revenue is expected to skyrocket compared to the year-ago quarter.
Investors will also be focused on whether Moderna will provide forward guidance for Q1 FY 2021, and if so, what the expected impact of mRNA-1273 sales will be on overall financial results. The company’s vaccine was only approved by the U.S. Food and Drug Administration (FDA) near the end of last year, meaning most of the sales will be generated starting in 2021. Analysts are extremely optimistic, forecasting a profitable Q1 FY 2021 as revenue keeps soaring.
Shares of Moderna, which first began trading publicly in late 2018, have soared over the past year. The stock’s exceptionally rapid rise has been fueled by investor optimism about the development of its coronavirus vaccine, which the company first began working on in January 2020. After early data in mid-November demonstrated the vaccine’s efficacy rate to be as high as 94.5%, the stock’s ascent rapidly accelerated before peaking in early December. The stock gave back some of those gains even as the U.S. government gave the Moderna vaccine Emergency Use Authorization (EAU) in mid-December. Then the stock resumed its upward momentum to new highs. Moderna’s shares have provided a total return of 757.3% over the past 12 months, well above the S&P 500’s total return of 20.2%.
Source: TradingView.
The stock has been relatively insensitive to Moderna’s weak earnings reports in recent quarters, being fueled instead by optimism about future profitability generated by vaccine sales. The company reported an adjusted loss per share of $0.53 in Q3 FY 2020. Revenue spiked 826.4%, marking the second consecutive quarter of growth. However, total revenue was mostly driven by increases in grant revenue, primarily due to the company’s agreement with the Biomedical Advanced Research and Development Authority (BARDA) related to the development of mRNA-1273.
In Q2 FY 2020, Moderna posted an adjusted loss of $0.24 per share. Revenue rose 407.2%, the first increase since Q3 FY 2018. The company said that the growth in total revenue was attributable to increases in both collaboration revenue and grant revenue. The growth in collaboration revenue was mainly due to a collaboration with AstraZeneca PLC (AZN). The rise in grant revenue was primarily attributable to the previously mentioned BARDA agreement related to the vaccine against COVID-19.
Analysts are expecting continued improvement in Moderna’s financial results in Q4 FY 2020. The company is expected to post an adjusted loss per share of $0.22, which would be the smallest adjusted loss in at least 14 quarters. Revenue is expected to rise 2,169.1%, topping any quarterly growth figures over the past several years by far. It would also mark the third quarter of revenue growth after six straight quarters of revenue declines. For full-year FY 2020, analysts are forecasting an adjusted loss per share of $1.32 as revenue increases 816.1%. It would be the first year of annual revenue growth since FY 2017.
| Moderna Key Metrics | ||||
|---|---|---|---|---|
| Estimate for Q1 2021 (FY) | Estimate for Q4 2020 (FY) | Q4 2019 (FY) | Q4 2018 (FY) | |
| Adjusted Earnings Per Share ($) | 2.42 | -0.22 | -0.31 | -0.88 |
| Revenue ($M) | 1,757.4 | 318.9 | 14.1 | 35.4 |
Source: Visible Alpha
As mentioned above, investors will also be closely looking for forward guidance from Moderna for future periods, especially the present Q1 and 2021 fiscal year. Moderna has already generated some revenue related to its COVID-19 vaccine, but that was primarily due to grant revenue from its BARDA agreement. But since its vaccine was only granted U.S. approval in late 2020, Moderna’s revenue growth and overall growth potential is largely unrealized. In the Q4 earnings announcement and management comments, investors will be looking for guidance from Moderna on the magnitude of future revenue and profits. In the company’s third quarter earnings report, CEO Stéphane Bancel said, “I believe that if we launch our COVID-19 vaccine, 2021 could be the most important inflection year in Moderna’s history.”
Currently, analysts are forecasting that Moderna will report adjusted earnings per share (EPS) of $2.42 in Q1 FY 2021. It would be the first quarter of profitability in at least 15 quarters. Revenue is expected to explode upward by 20,848.7% compared to the year-ago quarter as use of its COVID-19 vaccine spikes worldwide. For full-year FY 2021, analysts forecast adjusted EPS of $20.33 as annual revenue soars 2,001.9%. But some analysts say those soaring earnings may not last forever because Moderna’s windfall profits may attract more rivals to the market. While Moderna is one of the first to develop a vaccine against the coronavirus, it may have to prepare for how to protect its sizable market share.
