Moderna stock continued notching record highs in late July on several pieces of bullish vaccine news and as it joined the S&P 500, replacing AstraZeneca (AZN) buyout Alexion Pharmaceuticals.
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Recently, a committee of experts recommended the European Union allow Moderna‘s (MRNA) Covid vaccine for emergency use in teenagers ages 12-17. Further, Moderna won supply agreements with officials in Taiwan, Japan and Argentina.
The company also recently dosed the first participant in a study of its seasonal flu vaccine and its Covid shot gained emergency authorization in India. In recent testing, Moderna pitted the blood of vaccinated people against Covid variants. The blood produced antibodies against a number of variants, including the Delta variant first found in India.
In late June, the Food and Drug Administration warned against increased risk of heart inflammation in recipients of messenger RNA vaccines from Moderna Pfizer (PFE)/BioNTech (BNTX). European officials also added a warning to the label detailing the potential side effect.
Moderna has asked regulators in the U.S., Canada and Switzerland to authorize its Covid vaccine for teens. It’s also actively submitting information to the Food and Drug Administration in the hopes of gaining a full approval.
So, all in all, is Moderna stock a buy today?
A Fundamental Look At Moderna Stock
The biotech company is banking on its messenger RNA, or mRNA, technology. Messenger RNA is a substance in the body that delivers the instructions for creating protein.
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 will trigger the immune system to create disease-fighting antibodies and T-cells.
Moderna just reported its first quarter of profitability. In the first quarter, Moderna earned $2.84 per share, minus some items, on $1.94 billion in revenue. The latter number included $1.73 billion in sales of its Covid vaccine. Profits beat forecasts, but sales lagged.
The revenue growth was massive and profits are bullish, though it’s still early innings. CAN SLIM investors are encouraged to seek stocks with recent 20%-25% quarterly revenue and earnings growth. The bigger that growth, the better.
In the second quarter, analysts polled by FactSet expect Moderna to earn $5.96 per share on $4.21 billion in sales. Earnings would turn around from year-earlier losses and sales would grow by a quadruple-digit percentage.
Moderna stock has a Composite Rating of 79 out of a best-possible 99. The Composite Rating is a 1-99 measure of a stock’s key fundamental and technical measures. So MRNA stock barely ranks in the top quartile of all stocks on those metrics.
What Does 2020 Say About MRNA Stock?
Moderna stock went public at 23 in late 2018.
In 2019, the biotech stock popped about 38%. In 2020, though, shares rocketed more than 434%.
Still, the bullish Moderna stock action does not extend to fundamental measures. In 2020, Moderna reported a loss of $1.96 per share on $803 million in sales. Sales soared, but losses deepened.
In 2021, analysts expect Moderna to earn $26.17 per share on $18.77 billion in sales. Earnings would swing from year-ago losses and sales would soar by a quadruple-digit percentage.
Moderna Stock: Technical Analysis
Moderna stock surged above a profit-taking zone after breaking out of a cup-with-handle base on June 30. Investors are encouraged to take profits when a stock is 20%-25% above its entry. Shares are now well beyond their profit-taking zone, and aren’t currently forming a new base.
Moderna stock held above its 50-day and 200-day moving averages on July 26, MarketSmith.com shows.
Shares also have a perfect Relative Strength Rating of 99 out of a best-possible 99. The RS Rating is a 1-99 measure of a stock’s 12-month performance. This puts Moderna stock in the top 1% of all stocks on that metric.
But MRNA stock has a poor EPS Rating of 33, an improvement, but still reflecting years of per-share losses.
Keep tabs on IBD Digital for more on stock ratings.
Covid Vaccine Boosts Shares
In late July, the EMA’s Committee for Medicinal Products for Human Use issued a positive opinion on Moderna’s Covid vaccine for teens.
Moderna also signed a supply deal with Taiwan for 20 million doses of its Covid vaccine and potential variant-specific booster shot in 2022, and 15 million doses in 2023. It will also partner with Takeda Pharmaceutical (TAK) and Japan to supply an additional 50 million doses of its original shot and potential booster in 2022.
MRNA stock also rose earlier in the month after it announced a supply agreement with Argentina for 20 million doses of its Covid vaccine or its booster shot. The latter hasn’t been authorized. But delivery is expected in the first quarter.
At a final analysis, Moderna’s Covid vaccine was 94.1% effective. Earlier this year, the Centers for Disease Control and Prevention said a test of U.S. health care workers showed Pfizer’s and Moderna’s vaccines are 80% effective after the first dose. The second dose increases the effectiveness to 90%.
In an early-phase test, the potential Covid booster shot produced neutralizing antibodies against variants known as Beta, Kappa, Delta and Eta, as well as variants first identified in Uganda and Angola.
Earlier this year, the FDA allowed storage of Moderna’s vaccine for 24 hours at room temperature. The agency considers a punctured vial usable for up to 12 hours, up from prior guidance for six hours. Workers can also get 15 doses from two vials, up from 11 previously.
Moderna has also announced a long-term supply agreement for the shot with a coalition of low-income nations. It will supply 34 million doses this year and 466 million doses in 2022.
So, Is Moderna Stock A Buy Right Now?
Moderna stock isn’t a buy right now. Shares now bullishly extend from their buy zone and recently topped a profit-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 put together strong sales growth. Analysts expect that to continue in the future. Further, they see the solidly profitable in the near future. But analysts call for both metrics to slow down in 2022.
Shares have a strong RS Rating, but the company’s Composite Rating isn’t among the upper echelon of stocks.
It will be important to watch Moderna’s efforts to distribute its coronavirus vaccine. That could help stoke both MRNA stock and the biotech company’s financials.
To find the best stocks to buy and watch, check out IBD Stock Lists. Make sure to also keep tabs on stocks to buy or sell.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
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