No. of Recommendations: 5
Welcome, shrewd investors! I hope others interested in Moderna will join me here to discuss the company.
Moderna shot to fame as one of the first companies to provide an effective Covid-19 vaccine, and one of the most effective overall. They are a pioneer of creating pharmaceutical compounds that use messenger ribonucleic acid (mRNA) to instruct cells in the body to produce proteins with a desired medical effect.
Their stock soared as they reaped massive rewards from selling their Covid vaccine, then the stock crashed as Wall St. anticipated the market for the vaccine would dry up. More recently the stock has perked up in response to positive news regarding Moderna's cancer vaccine (a booster to a Merck chemotherapy which has looked fairly effective in early testing on melanoma patients) and their RSV vaccine (a respiratory disease that can be fatal to the very young and very old, which currently has no approved vaccine, though others are in the race to provide one). They have a significant pipeline of vaccines and therapeutic compounds in development, including further development of their Covid vaccine, endemic coronavirus and flu vaccines, combination respiratory vaccines (Covid, flu, RSV, endemic coronavirus in various combinations), AIDS, EBV (mononucleosis), Zika vaccines and much more.
Trailing PE is a measly ~7, on the strength of historical Covid vaccine sales, but those sales are rapidly declining as people put worries about the virus in the rear-view mirror and virtually all the population has protection from prior vaccination or infection or both. Trailing earnings per share are ~$28, projected to decline to ~$21/share when the Dec 2022 results are announced, and to be only ~$2 the following 12 months ending 12/2023, which estimate has declined from ~$6 as recently as 3 months ago.
Moderna has a strong balance sheet, as they have been flush with income from the Covid vaccine sales the last couple years. The last report showed $3 billion in cash, ~$14 billion in current assets vs ~$7 billion in current liabilities and ~$8b total liabilities. Their market cap is ~$73 billion and their price/book is ~4.2.
They have exercised some restraint with their financial bounty, making only one small acquisition so far that is complimentary to the mRNA technology, and instead investing in expanding their global operations and in stock buybacks.
They are involved in numerous lawsuits that could prove significant: they are suing Pfizer/Biontech for patent infringement regarding their mRNA Covid vaccine, and are also being sued themselves by a smaller company for alleged infringement.
The company has executed impressively, seizing with both hands the opportunity that the Covid pandemic presented them, and has an impressive pipeline and balance sheet, but there's certainly a large speculative component to projecting the future of the business. I invested with a couple of purchases after the stock price had tanked and I intend to hold for the long term, having faith in their positioning, technology and leadership, though I acknowledge it's no sure bet. The potential applications of their mRNA technology are immense, but it's unclear right now just how strong a moat their patent and technological prowess will prove to be.
