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Tuesday, January 26, 2021

Has Moderna Stock’s Growth Hit The Ceiling?

Moderna stock has spiked up by 400% in 2020 due to its mRNA-1273 vaccine candidate. The vaccine candidate’s commercial potential has already been added to the stock’s valuation.

Moderna Stock Coronavirus Opportunity

Firstly, the vaccine has already gained approval from the EU, the US, and other countries. The vaccine has claimed an unheard efficacy rate of 94.5%.

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Secondly, Moderna’s vaccine can be stored and shipped at a far lower temperature(-20 Celsius) than BioNTech and Pfizer’s vaccine. Both of these companies are filing for Emergency Use Approval with the FDA.

Thirdly, Moderna has talked about distributing 500M to 1B doses across 2021. So, when its competitors like Novavax, J&J, and AstraZeneca will get approvals, Moderna will already have a monopoly over the valuable territories. 

So, Moderna stock can earn from $6bn to $24bn in vaccine sales across 2021. However, this forecast is subjected to pricing agreements between Moderna and Governments, real-world demand for the vaccine, and the impact of vaccines to come.

Long-term Outlook and Risks Of Moderna Stock

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Long-lasting immunity via T-cell responses is set to determine how the market shapes up and whether Moderna stock growth story comes to an end.

If long-lasting immunity is found in one of the vaccines, the coronavirus vaccine space will evaporate in the same manner as the hepatitis C market space following the start of cures from Gilead Sciences and Abbvie.

Moderna stock is likely to see a peak in its revenue in 2020 with a steep fall in 2022 & 2023. The worst case that could happen to the stock is it being changed to a normal product, generating around $100 million annually. 

However, Moderna stock has a long-term outlook which is not only dependent on the vaccine market. It has around 21 candidates currently under clinical development.

Another issue that should be considered is that vaccine sales can help the company to accumulate a cash position of around 20 billion dollars by 2024. Obviously, in the process, Moderna stock shouldn’t go bonkers via a dividend, business deals, and share buybacks. A huge cash position creates a major significance in the bio pharmacy market. 

Should One Buy Moderna Stock?

Moderna might have a tough time hitting new highs in the near term. It is fairly valued right now but by barring some unexpected events like loss of a tough competitor or resistance of COVID-19 to long-lasting immunity.

But Moderna stock shouldn’t be shorted by investors. Its huge pipeline of therapeutics and vaccines will pick up growth in the long run. Probably, Moderna will hold a successful balance sheet by 2023. This balance sheet can be utilized towards licensing external deals and value-creating acquisitions.

The bottom line is that Moderna stock is the best-suited investors thinking for the long run. This innovative company can create enormous revenue for shareholders by projecting clinical assets and financial flexibility in the upcoming two to three decades. 2021 will be a volatile ride for the shareholders because of the chaotic nature that coronavirus vaccine space is creating.

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