Moderna stock popped in early September after the company announced its plan to test a combined Covid and flu vaccine.
The biotech company is also working on a combination vaccine for childhood respiratory syncytial virus and human metapneumovirus — both respiratory illnesses. Moderna (MRNA) made the announcements during its 2021 R&D Day.
Investors are also looking ahead to the possibility of booster shots for Moderna’s Covid vaccine. The White House’s Covid task force hopes to begin administering booster shots of the Pfizer (PFE)/BioNTech (BNTX) and Moderna vaccines beginning Sept. 20.
But Dr. Anthony Fauci, head of the National Institute of Allergy and Infectious Diseases, recently said Moderna boosters might trail Pfizer/BioNTech shots. Moderna still needs to submit some of its clinical data. Then, advisors with the Food and Drug Administration and the Centers for Disease Control and Prevention will need to examine the data and make their recommendations.
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 now has two quarters of profitability. In the second quarter, Moderna earned $6.46 per share, minus some items, on $4.35 billion in sales. The latter number includes close to $4.2 billion in sales of its Covid vaccine. Both measures beat forecasts. But Moderna stock slipped after the company announced a $1 billion share buyback.
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 third quarter, analysts polled by FactSet expect Moderna to earn $9.41 per share on $6.47 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 89 out of a best-possible 99. The Composite Rating is a measure of a stock’s key fundamental and technical measures. So MRNA stock ranks in the top 11% 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 $29.81 per share on $20.24 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 has surged above a profit-taking zone after breaking out of a cup-with-handle base. 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. In fact, Moderna stock is showing climax-run behavior and could soon reach a top.
Moderna stock held well above its 50-day and 200-day moving averages on Sept. 9, according to MarketSmith.com.
Shares also have a perfect Relative Strength Rating of 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 65, an improvement, but still reflecting years of per-share losses.
Moderna stock is also ninth on the IBD 50 list of elite stocks.
Keep tabs on IBD Digital for more on stock ratings.
Covid Vaccine Boosts Shares
Last month, Moderna finished submitting data to the FDA to secure full approval for its coronavirus vaccine. The vaccine from Pfizer and BioNTech is already fully approved. This means the companies can market to consumers and change the price.
Earlier this month, Moderna submitted initial data to the FDA and the European Medicines Agency for its Covid booster shot. In order to gain authorization, advisors with the FDA and CDC still need to examine the data and make their recommendations. That process is expected to start Sept. 17 for the Pfizer-BioNTech booster. Moderna could follow soon after.
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.
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.
But Moderna stock was rocked in June after the FDA investigated cases of heart inflammation tied to the two authorized mRNA vaccines. As part of their approval, Pfizer and BioNTech will continue to study that potential side effect in their vaccine.
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 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 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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