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Moderna (MRNA) Stock Before Q2 Earnings: To Buy or Not to Buy?
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Moderna (MRNA - Free Report) will report second-quarter earnings on Aug 1, before the opening bell. The Zacks Consensus Estimate for sales and earnings is pegged at $124.9 million and a loss of $3.47 per share, respectively. Both metrics indicate significant declines from the year-ago quarter’s levels.
MRNA’s loss estimates have remained consistent at $7.46 per share for 2024 and $5.29 for 2025 in the past 30 days.
Image Source: Zacks Investment Research
Earnings Surprise History
The biotech firm’s performance has been pretty impressive, exceeding earnings expectations in each of the trailing four quarters. It delivered a four-quarter earnings surprise of 55.39%, on average. In the last reported quarter, the company delivered an earnings surprise of 14.48%.
Image Source: Zacks Investment Research
Earnings Whispers
Per our proven model, companies with the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy), or #3 (Hold) have a good chance of delivering an earnings beat. This is not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
During the second quarter, sales of COVID-19 vaccines are likely to have been minimal due to lower demand. The Zacks Consensus Estimate for the vaccine sales is pegged at $102 million.
Moderna generates collaboration revenues from partners who use its mRNA technology to develop therapies targeting different indications. The Zacks Consensus Estimate and our model estimate for second-quarter collaboration revenues are pegged at around $13 million and $10 million, respectively.
Investors will look for updates from Moderna on its launch plans for the RSV vaccine mResvia, which received FDA approval for use in adults aged 60 years and older in May.This approval was an important milestone for the company as it marks the first product approval outside of the COVID-19 vaccine space.
Management expects to commercially launch mResvia in the country during the 2024-2025 respiratory virus season, which usually starts in the late fall.Regulatory filings are also under review, seeking marketing approval for mResvia in Europe and Australia. Management is also working on expanding the use of the vaccine in pediatric populations.
This puts the companyin direct competition with RSV vaccines Arexvy and Abrysvo, which are marketed by pharma giants GSK plc (GSK - Free Report) and Pfizer (PFE - Free Report) , respectively. GSK and Pfizer vaccines received approvals for their respective RSV vaccines last year.
Investors would also be interested in the company’s progress with the FDA filing for its mRNA-based influenza vaccine. Management previously announced plans to submit a regulatory filing for this vaccine before this year’s end, with a potential launch planned in second-half 2025.
The company is developing more than 40 mRNA-based investigational candidates in different stages of clinical studies, targeting various indications, including cancer. Moderna is evaluating multiple candidates in late-stage studies — mRNA-1647 [cytomegalovirus (CMV) vaccine], mRNA-4157/V940 [individualized neoantigen therapy (INT)] and mRNA-1083 (COVID-19 plus influenza combination vaccine).
An important candidate that has been garnering investor attention is mRNA-4157, an investigational INT that is being developed in collaboration with Merck (MRK - Free Report) . Moderna/Merck are evaluating mRNA-4157 in two pivotal phase III studies for melanoma and non-small cell lung cancer (NSCLC) indications. Since the onset of this year, Moderna/Merck initiated three new clinical studies evaluating mRNA-4157 across cutaneous squamous cell carcinoma (CSCC), renal cell carcinoma and muscle-invasive bladder cancer indications.
A single quarter’s results are not important for long-term investors. Let us delve deeper to understand whether to buy, sell, or hold Moderna’s stock.
Price Performance & Valuation
Year to date, Moderna’s stock has risen 21.0% againstthe industry’s decline of 2.0%. The stock has also outperformed the sector as well as the S&P 500.
MRNA Stock Outperforms Industry, Sector & S&P 500
Image Source: Zacks Investment Research
From a valuation standpoint, Moderna appears attractive relative to the industry and is trading below its 5-year mean. Going by the price/book (P/B) ratio, the company’s shares currently trade at 3.60, trailing 12-month book value, lower than 4.66 for the industry and 5-year mean of 4.26.
Image Source: Zacks Investment Research
Investment Thesis
Though Moderna’s topline continues to suffer significant year-over-year declines due to lower COVID-19 vaccinations, its strengthened cash position enables it to make increased investments toward supporting its pipeline development. As of March 2024-end, Moderna has cash, cash equivalents and marketable securities totaling approximately $12.2 billion. This cash should also enable the company to invest in support of its growth plans over the next few years.
Moderna plans to launch 15 new marketed products, including four in rare disease indications, over the next five years. These launches should help the company diversify its revenue stream, which is currently dependent on only one product. It intends to advance up to 50 new pipeline candidates in clinical development by 2028.
Unlike traditional vaccines which can take months to produce, mRNA-based vaccines can be developed quickly and also offer manufacturing scalability, something that was observed in the case of COVID-19 vaccines. Because of this major advantage, the company recently received a project award of $176 million from the U.S. government to accelerate the development of an mRNA-based vaccine program aimed at preventing the spread of the H5N1 virus, also known as bird flu, in humans.
Conclusion
No matter how second-quarter results play out, MRNA is an outstanding stock to have in one’s portfolio based on its strong cash balance and robust pipeline progress. As the stock currently trades at a discount to the industry, we recommend investors should accumulate this Zacks Rank #2 stock as it has growth potential.
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Moderna (MRNA) Stock Before Q2 Earnings: To Buy or Not to Buy?
Moderna (MRNA - Free Report) will report second-quarter earnings on Aug 1, before the opening bell. The Zacks Consensus Estimate for sales and earnings is pegged at $124.9 million and a loss of $3.47 per share, respectively. Both metrics indicate significant declines from the year-ago quarter’s levels.
MRNA’s loss estimates have remained consistent at $7.46 per share for 2024 and $5.29 for 2025 in the past 30 days.
Earnings Surprise History
The biotech firm’s performance has been pretty impressive, exceeding earnings expectations in each of the trailing four quarters. It delivered a four-quarter earnings surprise of 55.39%, on average. In the last reported quarter, the company delivered an earnings surprise of 14.48%.
Earnings Whispers
Per our proven model, companies with the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy), or #3 (Hold) have a good chance of delivering an earnings beat. This is not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Moderna has an Earnings ESP of 0.00% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Factors Shaping Upcoming Results
During the second quarter, sales of COVID-19 vaccines are likely to have been minimal due to lower demand. The Zacks Consensus Estimate for the vaccine sales is pegged at $102 million.
Moderna generates collaboration revenues from partners who use its mRNA technology to develop therapies targeting different indications. The Zacks Consensus Estimate and our model estimate for second-quarter collaboration revenues are pegged at around $13 million and $10 million, respectively.
Investors will look for updates from Moderna on its launch plans for the RSV vaccine mResvia, which received FDA approval for use in adults aged 60 years and older in May.This approval was an important milestone for the company as it marks the first product approval outside of the COVID-19 vaccine space.
Management expects to commercially launch mResvia in the country during the 2024-2025 respiratory virus season, which usually starts in the late fall.Regulatory filings are also under review, seeking marketing approval for mResvia in Europe and Australia. Management is also working on expanding the use of the vaccine in pediatric populations.
This puts the companyin direct competition with RSV vaccines Arexvy and Abrysvo, which are marketed by pharma giants GSK plc (GSK - Free Report) and Pfizer (PFE - Free Report) , respectively. GSK and Pfizer vaccines received approvals for their respective RSV vaccines last year.
Investors would also be interested in the company’s progress with the FDA filing for its mRNA-based influenza vaccine. Management previously announced plans to submit a regulatory filing for this vaccine before this year’s end, with a potential launch planned in second-half 2025.
The company is developing more than 40 mRNA-based investigational candidates in different stages of clinical studies, targeting various indications, including cancer. Moderna is evaluating multiple candidates in late-stage studies — mRNA-1647 [cytomegalovirus (CMV) vaccine], mRNA-4157/V940 [individualized neoantigen therapy (INT)] and mRNA-1083 (COVID-19 plus influenza combination vaccine).
An important candidate that has been garnering investor attention is mRNA-4157, an investigational INT that is being developed in collaboration with Merck (MRK - Free Report) . Moderna/Merck are evaluating mRNA-4157 in two pivotal phase III studies for melanoma and non-small cell lung cancer (NSCLC) indications. Since the onset of this year, Moderna/Merck initiated three new clinical studies evaluating mRNA-4157 across cutaneous squamous cell carcinoma (CSCC), renal cell carcinoma and muscle-invasive bladder cancer indications.
A single quarter’s results are not important for long-term investors. Let us delve deeper to understand whether to buy, sell, or hold Moderna’s stock.
Price Performance & Valuation
Year to date, Moderna’s stock has risen 21.0% againstthe industry’s decline of 2.0%. The stock has also outperformed the sector as well as the S&P 500.
MRNA Stock Outperforms Industry, Sector & S&P 500
From a valuation standpoint, Moderna appears attractive relative to the industry and is trading below its 5-year mean. Going by the price/book (P/B) ratio, the company’s shares currently trade at 3.60, trailing 12-month book value, lower than 4.66 for the industry and 5-year mean of 4.26.
Investment Thesis
Though Moderna’s topline continues to suffer significant year-over-year declines due to lower COVID-19 vaccinations, its strengthened cash position enables it to make increased investments toward supporting its pipeline development. As of March 2024-end, Moderna has cash, cash equivalents and marketable securities totaling approximately $12.2 billion. This cash should also enable the company to invest in support of its growth plans over the next few years.
Moderna plans to launch 15 new marketed products, including four in rare disease indications, over the next five years. These launches should help the company diversify its revenue stream, which is currently dependent on only one product. It intends to advance up to 50 new pipeline candidates in clinical development by 2028.
Unlike traditional vaccines which can take months to produce, mRNA-based vaccines can be developed quickly and also offer manufacturing scalability, something that was observed in the case of COVID-19 vaccines. Because of this major advantage, the company recently received a project award of $176 million from the U.S. government to accelerate the development of an mRNA-based vaccine program aimed at preventing the spread of the H5N1 virus, also known as bird flu, in humans.
Conclusion
No matter how second-quarter results play out, MRNA is an outstanding stock to have in one’s portfolio based on its strong cash balance and robust pipeline progress. As the stock currently trades at a discount to the industry, we recommend investors should accumulate this Zacks Rank #2 stock as it has growth potential.