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MRNA Stock: Are Overvaluation Concerns Warranted?

Biotech firm Moderna (NASDAQ:MRNA) has been one of the key players in combating COVID-19, becoming of the earliest pharmaceutical companies to launch a vaccine successfully. As...
MRNA Stock: Are Overvaluation Concerns Warranted? © Reuters. MRNA Stock: Are Overvaluation Concerns Warranted?

Biotech firm Moderna (NASDAQ:MRNA) has been one of the key players in combating COVID-19, becoming of the earliest pharmaceutical companies to launch a vaccine successfully. 

As such, Moderna’s valuation has soared to $169.4 billion at the time of writing. On a year-to-date basis alone, shares of MRNA stock have grown 275.7%. (See Moderna stock charts on TipRanks)

The company's stock price recently dipped on various concerns of overvaluation. A high-profile analyst report spells out the rationale for the selling of late. This leads to me being generally bearish on Moderna right now.

However, MRNA stock rebounded toward its all-time highs this past week. Let's discuss if this momentum can continue, and what might drive some volatility from here.

MRNA Stock Could Be Way Overvalued

At least, according to analysts.

High vaccine sales have worked wonders both for the pharmaceutical company’s revenue, and its stock price. The stock surged to nearly $500 in August, prompting Bank of America (NYSE:BAC) analyst Geoff Meacham to deem Moderna’s stock "unjustifiable on a fundamental basis." 

Meacham believed MRNA stock, at its highs, was approximately 75% overvalued. The prominent analyst kept his price target at $115 per share.

The BofA analyst said Moderna has to fulfill certain conditions to live up to what was a near-$200-billion valuation. First, it has to sell 1 billion to 1.5 billion COVID-19 vaccines each year until 2038. Second, the pharma company has to accomplish a 100% success rate for its entire pipeline.

Those are aggressive assumptions. For Meacham, those assumptions just didn't make sense.

Indeed, Moderna’s entire pipeline consists of four programs in Phase 2 trials, 10 programs in Phase 1, and eight preclinical programs. The pipeline comes with total peak sales of $30 billion.

Meacham and other analysts have noted that Moderna is likely years away from seeing its pipeline materialize to the degree in which the market is pricing.

COVID-19 Booster Shot Will Boost MRNA Revenue

That's not to say Moderna is without catalysts.

The company is on target to produce more COVID-19 vaccines, with the announcement of booster shots potentially coming soon for every American. The company believes, along with a majority of Americans, that these are likely necessary to prevent further catastrophe in the future.

However, the extent to which investors are pricing in booster shots remains to be seen.

Variants Could Propel MRNA Stock Further

The discovery of newer COVID variants has been a constant cause of concern among health experts. A new strain of novel coronavirus, named Mu, has begun its spread. Although this strain represents only 0.1% of total world cases, it accounts for 39% of all the cases in Colombia.

This Mu strain is reportedly much more immune to vaccines, and has already spread to over 40 nations, including the U.K. and the U.S. Another strain, named C.1.2, has been detected lately in South Africa. It comes with more mutations than any other variants.

Interestingly, new virus variants could mean pharma companies have to develop improved vaccines. The demand for vaccines may be sustained for years to come, thereby boosting research and development of newer jabs.

Wall Street’s Take

According to TipRanks' analysts rating consensus, MRNA stock is a Hold. Out of 14 ratings, there are four Buy, eight Hold and two Sell recommendations.

The average MRNA price target is $328. Analyst stock price targets range between a low of $115 per share, to a high of $485 per share.

Bottom Line

A number of key catalysts remain on watch for Moderna investors. Indeed, the run MRNA stock has been on has been impressive.

However, recent concerns about the company's valuation appear to be warranted. Investors considering MRNA stock at these elevated levels ought to be aware of the risks before jumping in.

Disclosure: At the time of publication, Chris MacDonald did not have a position in any of the securities mentioned in this article

Disclaimer: The information contained in this article represents the views and opinion of the writer only, and not the views or opinion of TipRanks or its affiliates, and should be considered for informational purposes only. TipRanks makes no warranties about the completeness, accuracy or reliability of such information. Nothing in this article should be taken as a recommendation or solicitation to purchase or sell securities. Nothing in the article constitutes legal, professional, investment and/or financial advice and/or takes into account the specific needs and/or requirements of an individual, nor does any information in the article constitute a comprehensive or complete statement of the matters or subject discussed therein. TipRanks and its affiliates disclaim all liability or responsibility with respect to the content of the article, and any action taken upon the information in the article is at your own and sole risk. The link to this article does not constitute an endorsement or recommendation by TipRanks or its affiliates. Past performance is not indicative of future results, prices or performance.

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28-09-2021 01:47:07 (UTC+7)

EUR/USD

1.1705

-0.0009 (-0.08%)

Summary

↑ Sell

Moving Avg:

Buy (4)

Sell (8)

Indicators:

Buy (1)

Sell (8)

EUR/USD

1.1705

-0.0009 (-0.08%)

Summary

↑ Sell

Moving Avg:

Buy (4)

Sell (8)

Indicators:

Buy (1)

Sell (8)

GBP/USD

1.3714

+0.0032 (+0.23%)

Summary

↑ Buy

Moving Avg:

Buy (12)

Sell (0)

Indicators:

Buy (7)

Sell (3)

USD/JPY

110.96

+0.24 (+0.22%)

Summary

Buy

Moving Avg:

Buy (7)

Sell (5)

Indicators:

Buy (4)

Sell (1)

AUD/USD

0.7289

+0.0031 (+0.43%)

Summary

↑ Buy

Moving Avg:

Buy (9)

Sell (3)

Indicators:

Buy (7)

Sell (0)

USD/CAD

1.2620

-0.0032 (-0.25%)

Summary

↑ Sell

Moving Avg:

Buy (1)

Sell (11)

Indicators:

Buy (0)

Sell (8)

EUR/JPY

129.88

+0.17 (+0.13%)

Summary

Sell

Moving Avg:

Buy (6)

Sell (6)

Indicators:

Buy (0)

Sell (9)

EUR/CHF

1.0833

+0.0010 (+0.10%)

Summary

↑ Sell

Moving Avg:

Buy (2)

Sell (10)

Indicators:

Buy (1)

Sell (8)

Gold Futures

1,751.25

-0.45 (-0.03%)

Summary

↑ Sell

Moving Avg:

Buy (0)

Sell (12)

Indicators:

Buy (1)

Sell (7)

Silver Futures

22.672

+0.247 (+1.10%)

Summary

↑ Sell

Moving Avg:

Buy (0)

Sell (12)

Indicators:

Buy (0)

Sell (8)

Copper Futures

4.2843

-0.0012 (-0.03%)

Summary

↑ Buy

Moving Avg:

Buy (10)

Sell (2)

Indicators:

Buy (8)

Sell (0)

Crude Oil WTI Futures

75.25

+1.27 (+1.72%)

Summary

↑ Sell

Moving Avg:

Buy (3)

Sell (9)

Indicators:

Buy (1)

Sell (8)

Brent Oil Futures

78.48

+1.25 (+1.62%)

Summary

↑ Sell

Moving Avg:

Buy (0)

Sell (12)

Indicators:

Buy (0)

Sell (9)

Natural Gas Futures

5.700

+0.500 (+9.62%)

Summary

Neutral

Moving Avg:

Buy (6)

Sell (6)

Indicators:

Buy (2)

Sell (4)

US Coffee C Futures

194.98

+0.63 (+0.32%)

Summary

↑ Buy

Moving Avg:

Buy (12)

Sell (0)

Indicators:

Buy (5)

Sell (0)

Euro Stoxx 50

4,165.48

+6.97 (+0.17%)

Summary

↑ Sell

Moving Avg:

Buy (0)

Sell (12)

Indicators:

Buy (0)

Sell (9)

S&P 500

4,450.69

-4.79 (-0.11%)

Summary

↑ Buy

Moving Avg:

Buy (12)

Sell (0)

Indicators:

Buy (6)

Sell (2)

DAX

15,573.88

+42.13 (+0.27%)

Summary

↑ Sell

Moving Avg:

Buy (0)

Sell (12)

Indicators:

Buy (0)

Sell (8)

FTSE 100

7,063.40

+11.92 (+0.17%)

Summary

↑ Sell

Moving Avg:

Buy (1)

Sell (11)

Indicators:

Buy (1)

Sell (7)

Hang Seng

24,208.78

+16.62 (+0.07%)

Summary

↑ Buy

Moving Avg:

Buy (10)

Sell (2)

Indicators:

Buy (8)

Sell (0)

US Small Cap 2000

2,294.85

+40.97 (+1.82%)

Summary

↑ Buy

Moving Avg:

Buy (11)

Sell (1)

Indicators:

Buy (7)

Sell (2)

IBEX 35

9,002.90

+129.80 (+1.46%)

Summary

Buy

Moving Avg:

Buy (7)

Sell (5)

Indicators:

Buy (4)

Sell (2)

BASF SE NA O.N.

64.740

+1.040 (+1.63%)

Summary

↑ Sell

Moving Avg:

Buy (1)

Sell (11)

Indicators:

Buy (1)

Sell (5)

Bayer AG NA

47.47

+0.99 (+2.13%)

Summary

↑ Buy

Moving Avg:

Buy (12)

Sell (0)

Indicators:

Buy (9)

Sell (0)

Allianz SE VNA O.N.

196.19

+3.85 (+2.00%)

Summary

↑ Buy

Moving Avg:

Buy (12)

Sell (0)

Indicators:

Buy (6)

Sell (2)

Adidas AG

278.80

-2.77 (-0.98%)

Summary

↑ Sell

Moving Avg:

Buy (0)

Sell (12)

Indicators:

Buy (0)

Sell (10)

Deutsche Lufthansa AG

6.561

+0.328 (+5.26%)

Summary

↑ Buy

Moving Avg:

Buy (11)

Sell (1)

Indicators:

Buy (7)

Sell (2)

Siemens AG Class N

147.27

-0.84 (-0.57%)

Summary

↑ Sell

Moving Avg:

Buy (1)

Sell (11)

Indicators:

Buy (0)

Sell (10)

Deutsche Bank AG

11.120

+0.285 (+2.63%)

Summary

↑ Buy

Moving Avg:

Buy (10)

Sell (2)

Indicators:

Buy (5)

Sell (3)

 EUR/USD1.1705↑ Sell
 GBP/USD1.3714↑ Buy
 USD/JPY110.96Buy
 AUD/USD0.7289↑ Buy
 USD/CAD1.2620↑ Sell
 EUR/JPY129.88Sell
 EUR/CHF1.0833↑ Sell
 Gold1,751.25↑ Sell
 Silver22.672↑ Sell
 Copper4.2843↑ Buy
 Crude Oil WTI75.25↑ Sell
 Brent Oil78.48↑ Sell
 Natural Gas5.700Neutral
 US Coffee C194.98↑ Buy
 Euro Stoxx 504,165.48↑ Sell
 S&P 5004,450.69↑ Buy
 DAX15,573.88↑ Sell
 FTSE 1007,063.40↑ Sell
 Hang Seng24,208.78↑ Buy
 Small Cap 20002,294.85↑ Buy
 IBEX 359,002.90Buy
 BASF64.740↑ Sell
 Bayer47.47↑ Buy
 Allianz196.19↑ Buy
 Adidas278.80↑ Sell
 Lufthansa6.561↑ Buy
 Siemens AG147.27↑ Sell
 Deutsche Bank AG11.120↑ Buy
Mua/Bán 1 chỉ SJC
# So hôm qua # Chênh TG
SJC Eximbank5,665/ 5,715
(0/ 0) # 900
SJC HCM5,635/ 5,700
(0/ 0) # 885
SJC Hanoi5,635/ 5,702
(0/ 0) # 887
SJC Danang5,635/ 5,702
(0/ 0) # 887
SJC Nhatrang5,635/ 5,702
(0/ 0) # 887
SJC Cantho5,635/ 5,702
(0/ 0) # 887
Cập nhật 28-09-2021 01:47:09
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ↀ Giá vàng thế giới
$1,750.82+1.320.08%
Live 24 hour Gold Chart
ʘ Giá bán lẻ xăng dầu
Sản phẩmVùng 1Vùng 2
RON 95-IV2204022480
RON 95-II,III2194022370
E5 RON 92-II2071021120
DO 0.05S1658016910
DO 0,001S-V1693017260
Dầu hỏa1564015950
ↂ Giá dầu thô thế giới
WTI$75.17-0.48-0.65%
Brent$79.31+0.550.69%
$ Tỷ giá Vietcombank
Ngoại tệMua vàoBán ra
USD22.630,0022.860,00
EUR25.993,7727.346,60
GBP30.324,2231.591,18
JPY200,45212,05
KRW16,7520,39
Cập nhật lúc 18:54:42 27/09/2021
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