Biotechnology company Moderna, Inc.’s (MRNA) COVID-19 vaccine was the second vaccine approved for EUA by the U.S. FDA. Still, investors remain worried about Pfizer Inc.’s (PFE) dominance in the vaccine space. MRNA’s COVID-19 vaccine is not yet approved for adolescents as regulators continue to study the rare risk of heart inflammation. Also, last month, the company’s CEO Stéphane Bancel said that existing COVID-19 vaccines are unlikely to be as effective against the omicron coronavirus variant.

MRNA stock has lost 42.8% in price over the past month to close Friday’s trading session at $257.06. MRNA has received several orders for its COVID-19 vaccine. For example, on December 1, it announced a revised supply agreement with the U.K. government for up to 60 million doses. However, its COVID-19 vaccine is the company's only commercial product, while its other products are still in in clinical trial stages.

MRNA’s stock declined nearly 10% in price on December 1, after the company lost a patent dispute. Also, MRNA’s CEO recently sold 19,000 shares. So, MRNA’s near-term prospects look uncertain.

Click here to checkout our Healthcare Sector Report for 2021

Here are the factors that could influence MRNA’s performance in the coming months:

Impressive Financials

For the third quarter, ended September 30, 2021, MRNA’s total revenue increased 3,065% year-over-year to $4.97 billion. Its product sales came in at $4.81 billion. Its income from operations was $3.56 billion compared to a $235 million loss in the prior-year quarter. Its net income was  $3.33 billion compared to a $233 million loss in the year-ago period. And its EPS was  $7.70 compared to a $0.59  loss per share  in the prior-year period.

COVID-19 Vaccine-Related Profit May Decline

MRNA’s sales to the United States government were $1.20 billion in the third quarter, reflecting 73 million doses delivered compared to $2.10 million and 126 million doses in the second quarter. Its deliveries of its COVID-19 vaccine in fiscal 2021 is expected to be between 700 million and 800 million doses at the 100 µg dose level.

Longer delivery lead times for international shipments and exports could shift deliveries to early 2022, and the temporary impact from expansion of fill/finish capacity and ramp-up of product release to market could also impact its output. Furthermore, because MRNA is expected to deliver vaccines to lower-income countries, its profit margins may be significantly impacted.

Disappointing Results of Flu Vaccine Candidate

On December 10, MRNA announced the first interim data from the Phase 1 study of its quadrivalent seasonal flu vaccine candidate, mRNA-1010. However, the stock declined by nearly 14% on December 10 after the first human trial results from its experimental seasonal flu shot fell short of Wall Street’s expectations. Bloomberg Intelligence analyst Sam Fazeli said, “The ‘ok’ data from the Phase I trial of Moderna’s flu shot show it to be similar to that of Sanofi’s already marketed flu vaccine, but perhaps with worse side effects.”

POWR Ratings Reflect Uncertainty

MRNA has an overall C rating, which equates to a Neutral in our POWR Ratings system. The POWR Ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree. 

Our proprietary rating system also evaluates each stock based on eight distinct categories. MRNA has a B grade for Value, which is in sync with its 9.70x forward non-GAAP P/E, which is 56.6% lower than the 22.37x industry average.

However, the stock has an F grade for Momentum, which is consistent with its 42.8% loss over the past three months. It has an F grade for Stability, which is in sync with its 1.34 beta.

MRNA is ranked #33 out of 472 stocks in the Biotech industry. In addition to the POWR Rating grades I have just highlighted, we have also rated the stock for Sentiment, Growth, and Quality. Get all the MRNA ratings here.

Bottom Line

While MRNA is a well-known name in the COVID-19 vaccine space, its  supply prospects and related profit margin remains uncertain. The stock is currently trading below its 50-day and 200-day moving averages of $298.96 and $267.83,respectively, indicating a downtrend. Also, the stock is highly volatile. So, we think it could be wise to wait before scooping up its shares.

How Does Moderna (MRNA) Stack Up Against its Peers?

While MRNA has an overall POWR Rating of C, one  could check out these A-rated (Strong Buy) stocks within the Biotech industry: Otsuka Holdings Co., Ltd. (OTSKY) and Vertex Pharmaceuticals Incorporated (VRTX).

Click here to checkout our Healthcare Sector Report for 2021

MRNA shares rose $3.18 (+1.24%) in premarket trading Monday. Year-to-date, MRNA has gained 146.06%, versus a 27.14% rise in the benchmark S&P 500 index during the same period.

Since she was young, Manisha has had a strong interest in the stock market. She majored in Economics in college and has a passion for writing, which has led to her career as a research analyst.

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