Moderna stock has taken a beating in November on a myriad of challenges facing its Covid vaccine.
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First, the Food and Drug Administration said it would need more time to review Moderna‘s (MRNA) vaccine in teens. Then, the company slashed its outlook for 2021 sales and deliveries. Finally, Pfizer (PFE) unveiled new data showing its Covid pill cut hospitalizations and deaths by 89% in a study of non-hospitalized, unvaccinated mild-to-moderate patients.
The latter point caused Moderna stock to take a bath on Nov. 5.
That all followed a sideways run for MRNA stock in October. Merck (MRK) unveiled promising results for its antiviral pill in Covid, a rival to Pfizer. On a bullish point, U.S. authorities signed off on a half-sized booster dose of Moderna’s shot at six months for people age 65 and older, and adults with other risk factors.
The agencies also authorized a mix-and-match strategy for boosters. Johnson & Johnson‘s (JNJ) booster also gained authorization.
So, all in all, is Moderna stock a buy or a sell 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 now has three quarters of profitability. In the third quarter, Moderna earned $7.70 a share on $4.97 billion in sales. The latter number includes $4.81 billion in sales of its Covid vaccine. Both measures lagged expectations, though grew bullishly.
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 fourth quarter, analysts polled by FactSet expect Moderna to earn $8.58 per share on $5.85 billion in sales. Earnings would turn around from year-earlier losses and sales would grow by a triple-digit percentage.
Moderna stock has a Composite Rating of 70 out of a best-possible 99. The Composite Rating is a measure of a stock’s key fundamental and technical measures. So MRNA stock narrowly outranks two-thirds of all stocks on those measures.
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.
Moderna also just cut its outlook for 2021. Now, the company expects $15 billion to $18 billion in full-year sales of its Covid shot. That lagged analysts’ projections and MRNA stock tumbled.
The company also cut its expectations for production in 2021 to 700 million to 800 million doses, down from its prior outlook for 800 million to 1 billion.
In 2021, analysts expect Moderna to earn $27.14 per share on $17.85 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 isn’t currently forming a chart pattern, according to MarketSmith.com. Investors are encouraged to take buy a stock when it tops a buy point.
In fact, Moderna stock tumbled below its 50-day moving average in late September, triggering a sell signal. Shares undercut their 200-day line on Nov. 5.
Shares have a strong Relative Strength Rating of 96. The RS Rating is a 1-99 measure of a stock’s 12-month performance. This puts Moderna stock in the top 4% of all stocks on that metric.
But MRNA stock has a poor EPS Rating of 66, an improvement, but still reflecting years of per-share losses.
Keep tabs on IBD Digital for more on stock ratings.
Covid Vaccine Facing Competition
Moderna has finished submitting data to the FDA to secure full approval for its coronavirus vaccine. The vaccine from Pfizer and its partner, BioNTech is already fully approved for age 16 and older. This means the companies can market to consumers and change the price.
Recently, Moderna submitted initial data to the FDA and the European Medicines Agency for its Covid booster shot. The FDA and Centers for Disease Control and Prevention just authorized the Covid booster.
Test data suggest a booster shot produces antibodies that can handle coronavirus variants known as beta, kappa, delta and eta, as well as variants first identified in Uganda and Angola.
Also, in late July, the European Medicines Agency’s Committee for Medicinal Products for Human Use issued a positive opinion on Moderna’s Covid vaccine for teens, ages 12-17.
But the FDA is holding off on making its decision on the Moderna shot in teens to investigate the potential tie between the messenger RNA vaccines and heart inflammation in young people. As part of their approval, Pfizer and its partner, BioNTech (BNTX), will continue to study that potential side effect in their vaccine.
The firm also unveiled promising results for a half-sized dosage of its vaccine in children age 6-11. Children produced a comparable level of antibodies to what the company saw in young adults. Further, side effects were in line with what the company has seen in teens and adults. Moderna is still enrolling children below the age of 6 in the ongoing study.
So, Is Moderna Stock A Buy Or Sell Right Now?
Moderna stock isn’t a buy right now. Shares aren’t forming a definitive chart pattern and, bearishly, have crossed their 50-day and 200-day lines, which are sell signals.
The company has managed to put together strong sales growth. Analysts expect that to continue in the future. Further, they see the company as solidly profitable in the near future. But analysts call for both metrics to decline in 2022.
Shares have a strong RS Rating, but the company’s Composite Rating is below 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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