Moderna beats estimates; do strong vaccine sales make it a buy?

Posted: 4 May 2022 11:51 am

The biotech company expects COVID-19 sales contracts to grow to $21 billion this year. Analysts see the stock price growing as well.

Moderna (MRNA) first-quarter earnings and revenue soared past Wall Street consensus estimates, and the company expects sales of its COVID-19 vaccine to be even bigger in the second half of the year.
That’s good news to investors who have been concerned that an oversupply of vaccines is threatening Moderna’s market share. Coronavirus cases have been trending higher in the US and other parts of the world over the past month, boosting demand for COVID shots.
Shares of Moderna fell 1.5% to $144.15 at around 10:30 am in New York, swinging from a gain earlier. The stock was swept by prevailing negative sentiment across the market ahead of the Federal Reserve decision that’s widely expected to result in a more aggressive interest rate increase.
But with the stock price down 71% from its peak, it could be due for a bounce. Wall Street is forecasting gains.

Moderna beats on both top and bottom lines

Moderna sold $5.9 billion of its COVID-19 vaccine Spikevax in the first three months of the year, pushing its total revenue for the quarter to $6.1 billion and easily beating Wall Street’s $4.6 billion estimate.
Spikevax is the company’s only commercially available product. Sales of the company’s COVID vaccine more than tripled from $1.7 billion in the same period last year.
The Massachusetts-based drug manufacturer reported $3.7 billion in net income for the quarter, more than tripling the $1.2 billion it reported in the same period last year. Earnings rose to $8.58 per share, up from $2.82 per share a year earlier.

Regulatory approval for COVID booster against Omicron

Moderna CEO Stephane Bancel told CNBC’s Meg Tirrell Wednesday morning that he expects Moderna to record even stronger vaccine sales in the second half of the year as SARS-CoV-2 becomes endemic and fall vaccination campaigns kick off. Bancel said he expects to receive regulatory approval in late summer for an Omicron-containing bivalent COVID booster.
The FDA’s advisory board has a tentative meeting set for June 28 to discuss whether the SARS-CoV-2 strain composition of COVID-19 vaccines should be modified, and if so, which strain(s) should be selected for Fall 2022.
Moderna maintained its full-year guidance of $21 billion in Spikevax sales, which is based on signed agreements with governments, according to an investor presentation. Bancel said the forecast doesn’t include any orders from the US, so the final number could come in higher.

Thinking of buying Moderna stock?

Shares of Moderna have fallen around 71% since hitting an all-time high of $497.49 back in August 2021. At the time, Bank of America analyst Geoff Meacham said Moderna’s stock price was “ridiculous” and could fall 75% from its then current levels.
Investors now need to decide on a fair value for the stock. In March, Morningstar analyst Karen Andersen raised its fair value estimate to $232 from $202 after boosting its long-term sales projections for Moderna’s COVID vaccine. Whether we see any further upside revisions now that Moderna forecasts sales to keep rising remains to be seen.
Investors also need to consider Moderna’s pipeline. The company has four programs in Phase 3 trials, including an Omicron-containing bivalent COVID booster and flu, respiratory syncytial virus (RSV) and cytomegalovirus (CMV) vaccines. Bancel said the company plans to use a portion of its $19.3 billion in cash pile to progress these products over the course of 2022.
For more information and a five-year view of this stock, see our dedicated guide to Moderna stock.
The company is also looking at possible acquisitions in both the US and abroad and expanding its pipeline beyond infectious diseases.
“I’m really excited that this year, we’re going to have data in patients for rare genetic diseases and also for personalized cancer vaccines,” Bancel told CNBC’s Meg Tirrell.
Wall Street currently gives the stock an average price target of $234.88, which could mean a 64% premium over its current price. Of the 20 analysts covering the stock, nine give it either a Strong Buy or Buy, 10 give it a Hold and one has it as underperforming the broader market. No analysts have a sell rating on the stock.

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At the time of publication, Matt Miczulski owned shares of MRNA.

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