Shares of pandemic darling and mRNA tech pioneer Moderna (NASDAQ:MRNA) have been ailing of late, as sales from its COVID-19 business have dwindled in the last few years. Undoubtedly, those who still wish to get vaccinated against COVID-19 (yes, it’s still out there) can get the Spikevax jab. That said, as COVID-19 transitions from pandemic to endemic, it’s clear Moderna will need to diversify its revenue stream if its stock is to rebound to new highs.
Fortunately, the firm has a full vaccine pipeline that may help take it back to (or perhaps beyond) its former glory. However, until the day comes that Moderna delivers such a finished vaccine, the stock is likely to stay stuck in limbo, granting value investors ample time to do their homework.
In many ways, Moderna stock still seems like more of a “show-me” story. However, if you decide to wait until after a blockbuster-potential drug gets the final green light, it may be too late to capture the most upside. Given this, Moderna remains a risky play as it looks to replicate the profound success it had with its incredibly timely COVID-19 vaccine.
Can the once-cherished biotech company pull the rabbit out of the hat again, or is it doomed to continue its descent as the COVID-19 pandemic becomes a distant memory? I think it’s a mistake to bet against Moderna amid its hopeful return to growth.
There’s no shortage of Wall Street analysts who are staying bullish on MRNA stock, even as the stock lacks meaningful momentum, with ample uncertainty clouding its future cash flow stream. I’m also inclined to remain bullish on the mRNA vaccine innovator as it looks to find the next big thing, whether it be an RSV vaccine, a flu vaccine, a flu/COVID-19 vaccine combination, or, perhaps most intriguingly, a personalized cancer vaccine it’s working on with Merck (NYSE:MRK).
Moderna Stock: Plenty of Potential Power Players in the Pipeline
Though Moderna’s flu and RSV vaccines could be significant (and likely timeliest) catalysts for rebooting Moderna’s growth profile, I view the cancer vaccines as the biggest potential needle mover (please forgive the pun) in the company’s pipeline. Of course, it’s impossible to tell when or if such an experimental vaccine will even see the light of day.
Regardless, let’s not forget that Moderna is the same biotech innovator that delivered its COVID-19 vaccine in record time amid the pandemic lockdown days, when it was uncertain when it’d be safe to go outside again.
Though MRNA stock remains difficult to value at this juncture as its COVID-19 business drags its feet, I continue to view the stock as a low-cost choice at 2.8 times price-to-book (P/B) for a breakthrough success of its “stacked” vaccine pipeline.
If one of Moderna’s more promising vaccine candidates gains approval, the stock could blast off at a furious rate, perhaps in just a few sessions. However, if such candidates show less promise or, worse, fall flat in the face of their late-stage clinical trials, there’s no question that MRNA stock could stand to be punished further.
MRNA Stock: A Huge Upgrade from a Big-Name Analyst on Wall Street
Either way, it’s hard to imagine expectations getting any more muted than they are, with MRNA stock going for just north of $100 per share. Hartaj Singh of Oppenheimer, who recently upgraded the stock to Buy from Hold, seems to think “some material catalysts” could be coming as COVID-19 vaccine sales begin to show signs of bottoming. Specifically, the RSV vaccine, cancer vaccines, and “next generation kind of flu vaccine using the mRNA technology” could reignite investor excitement as soon as this year.
Additionally, Mr. Singh also remarked on the company’s “very high performance culture.” He’s absolutely right. Moderna was a clutch performer during the worst days of the pandemic, and I think that 10 years from now, Moderna will be so much more than just a COVID-19 vaccine story.
Mr. Singh’s comments are nothing short of encouraging. However, don’t expect much from MRNA stock until such products hit the market. It’s a tough trade but a potentially intriguing long-term investment.
For now, not all analysts share Mr. Singh’s enthusiasm, with six analysts rating MRNA a Hold. As innovative as Moderna is, I can’t say I blame the folks who’d rather wait and see. After all, it’s really hard to project future revenues because we can never know for sure what vaccines will be approved down the road.
Is MRNA Stock a Buy, According to Analysts?
On TipRanks, MRNA stock comes in as a Moderate Buy. Out of 17 analyst ratings, there are nine Buys, six Holds, and two Sell recommendations. The average MRNA stock price target is $134.56, implying upside potential of 29%. Analyst price targets range from a low of $59.00 per share to a high of $310.00 per share.
The Takeaway
Moderna stock will not be for everybody, not while its COVID-19 sales dwindle and the status of late-stage clinical vaccine candidates remains relatively hazy. However, if you believe in the company and its respected CEO, Stéphane Bancel, I’d have to say the stock is worth keeping on your radar as mRNA vaccine technology looks to expand beyond COVID-19.
