Moderna stock hit a record high in late June after the company said its Covid vaccine protected against a handful of variants.
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The company also gained emergency authorization in India, where the Delta variant is running rampant. Moderna (MRNA) joins AstraZeneca (AZN) in India where the country also administers a homegrown vaccine and Russia’s Sputnik V.
Last month, though, the U.S. Centers for Disease Control and Prevention began investigating cases of heart/tissue inflammation following a second dose of messenger RNA vaccines from Moderna and Pfizer (PFE)/BioNTech (BNTX).
Moderna also has asked the Food and Drug Administration to authorize its Covid vaccine for teens. Plus, it’s actively submitting information in the hopes of gaining full approval. The latter would allow the vaccine to stay on the market after the pandemic ends. Moderna also could change the price and market directly to consumers.
Meanwhile, Moderna is working on a booster for its Covid vaccine. A third shot of its first vaccine and a variant-specific vaccine both produced antibodies against the mutation first discovered in South Africa, Moderna said in May.
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.
The type of coronavirus that causes Covid-19 is covered in so-called spike proteins. 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 $6.04 per share on $4.28 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 72 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 ranks just below 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 $25.54 per share on $18.32 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. As of midday trading on July 8, shares were about 23% above their buy point.
Shares were above their 50-day and 200-day moving averages on July 8 according to MarketSmith.com.
Shares also have a strong Relative Strength Rating of 98 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 2% of all stocks on that metric.
But MRNA stock has a poor EPS Rating of 32, an improvement, but still reflecting years of per-share losses.
Keep tabs on IBD Digital for more on stock ratings.
Covid Vaccine Boosts Shares
At a final analysis, Moderna’s Covid vaccine was 94.1% effective. In March, the CDC said a test of health care workers in the U.S. showed Pfizer’s and Moderna’s vaccines are 80% effective after the first dose. The second dose increases the effectiveness to 90%.
Now, Moderna is working to expand its Covid vaccine to other populations. In June, it asked for FDA authorization in teens. It’s also working on a booster shot and testing its vaccine against variants. In an early-phase test, the vaccine produced neutralizing antibodies against variants known as Beta, Kappa, Delta and Eta, as well as variants first identified in Uganda and Angola.
The FDA has said it would allow Moderna’s vaccine to be stored for 24 hours at room temperature. A punctured vial is now considered 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.
On June 7, Moderna said it would partner with Medison Pharma to commercialize the Covid vaccine in central eastern Europe and Israel. Moderna stock popped on the news.
But MRNA stock was under pressure in mid-June after the CDC met to discuss the risk of heart inflammation in young men following a second dose of the Moderna and Pfizer vaccines. The agency’s advisory committee says there’s a “likely association” between the shots and inflammation.
So, Is Moderna Stock A Buy Right Now?
Moderna stock isn’t a buy right now. Shares are now bullishly extended from their buy zone and even briefly 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. That’s expected to continue in the future. Further, the company is expected to be solidly profitable in the near future.
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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