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Should Moderna Stock Be in Your Portfolio Pre-Q3 Earnings?
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Moderna (MRNA - Free Report) is set to report third-quarter 2024 earnings on Nov. 7, before the opening bell. The Zacks Consensus Estimate for sales and earnings is pegged at $1.25 billion and a loss of $1.91 per share, respectively. Both metrics indicate a significant decline from the year-ago levels.
Estimates for Moderna’s 2024 loss per share have increased from $9.52 to $9.88 in the past 60 days. During the same period, estimates for 2025 loss per share have risen from $7.37 to $8.59.
Image Source: Zacks Investment Research
MRNA’s Earnings Surprise History
The biotech’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 54.97%.
Image Source: Zacks Investment Research
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
What Our Model Predicts for MRNA
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.
The company is likely to have generated a major portion of its revenues from selling its COVID-19 vaccine. Our model estimate for the vaccine’s sales is pegged at $1.12 billion, implying a significant decline from the year-ago level due to lower demand.
This will be the first quarter when Moderna starts recording revenues from the sale of its RSV vaccine mResvia, which received FDA approval in May.This approval is a milestone for the company as it marks the first product approval outside the COVID-19 vaccine space. Our model estimate for mResvia sales is pinned at $70 million.
Though this number might seem encouraging to some, it is significantly low when compared to the initial sales of currently marketed RSV vaccines Arexvy and Abrysvo, when they were commercially launched last year by pharma giants GSK plc (GSK - Free Report) and Pfizer (PFE - Free Report) , respectively. This softer sales expectation can be attributed to the restrictive recommendations for this year’s RSV vaccination season issued by the U.S. CDC in June, combined with the presence of both the GSK and Pfizer vaccines in the target market space.
Moderna is developing more than 40 mRNA-based investigational candidates in different stages of clinical studies, targeting various indications, including cancer. Management is evaluating multiple candidates in late-stage studies — mRNA-1647 [cytomegalovirus (CMV) vaccine], mRNA-1010 (influenza vaccine), mRNA-4157/V940 [individualized neoantigen therapy (INT)] and mRNA-1083 (COVID-19 plus influenza combination vaccine).
An important candidate garnering investor attention is mRNA-4157, an investigational INT being developed in collaboration with Merck (MRK - Free Report) . Moderna and Merck are evaluating mRNA-4157 in three pivotal phase III studies — one in melanoma indication and the other two in the non-small cell lung cancer (NSCLC) space. Since the onset of this year, Moderna and Merck have also started three new clinical studies evaluating mRNA-4157 across cutaneous squamous cell carcinoma (CSCC), renal cell carcinoma and muscle-invasive bladder cancer indications. Investors would likely seek an update from management on the cancer therapy’s clinical development across these studies.
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 stock at present.
MRNA’s Stock Price Performance & Valuation
Year to date, Moderna’s shares have plunged 46.2% against the industry’s growth of 14.0%. The stock has also underperformed the sector as well as the S&P 500.
From a valuation standpoint, Moderna appears attractive compared to the industry. Going by the price/sales (P/S) ratio, the company’s shares currently trade at 4.07, trailing 12-month sales value, lower than 6.90 for the industry.
Image Source: Zacks Investment Research
Our Investment Thesis on MRNA Stock
Though Moderna’s top line 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 June 2024-end, Moderna had cash, cash equivalents and marketable securities totaling approximately $10.8 billion. This cash should also enable the company to support its growth plans over the next few years.
We like the company’s recently announced portfolio prioritization and cost efficiency program. It provides investors with an assurance that management is now looking at the longer picture. Instead of fixating solely on R&D, Moderna aims to improve its top line by focusing on products that are either nearing approvals or already on the market.
Management intends to launch 10 new marketed products over the next three years. To achieve this goal, it intends to submit three regulatory filings seeking the FDA’s approval before this year’s end. This includes fresh regulatory filings for mRNA-1283 (next-generation COVID-19 vaccine) and mRNA-1083. Moderna also plans to file a regulatory filing for mResvia seeking label expansion for use in high-risk adults aged 18-59 years.
To accelerate the regulatory timeline for these three filings, the company intends to support each of them with a priority review voucher. Using these vouchers reduces the FDA’s review period for each filing by four months. These launches should help Moderna further diversify its revenue stream.
Stay Invested in MRNA Stock
No matter how the third quarter results play out, we believe that this Zacks Rank #3 company exhibits growth potential based on its strong cash balance and robust pipeline progress. As the stock currently trades at a discount to the industry, we recommend investors to add Moderna to their portfolio. Any major decline in the company’s share price could be an ideal investment opportunity for long-term investors.
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Should Moderna Stock Be in Your Portfolio Pre-Q3 Earnings?
Moderna (MRNA - Free Report) is set to report third-quarter 2024 earnings on Nov. 7, before the opening bell. The Zacks Consensus Estimate for sales and earnings is pegged at $1.25 billion and a loss of $1.91 per share, respectively. Both metrics indicate a significant decline from the year-ago levels.
Estimates for Moderna’s 2024 loss per share have increased from $9.52 to $9.88 in the past 60 days. During the same period, estimates for 2025 loss per share have risen from $7.37 to $8.59.
MRNA’s Earnings Surprise History
The biotech’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 54.97%.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
What Our Model Predicts for MRNA
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 -2.67% and a Zacks Rank #3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Factors Shaping MRNA’s Upcoming Results
The company is likely to have generated a major portion of its revenues from selling its COVID-19 vaccine. Our model estimate for the vaccine’s sales is pegged at $1.12 billion, implying a significant decline from the year-ago level due to lower demand.
This will be the first quarter when Moderna starts recording revenues from the sale of its RSV vaccine mResvia, which received FDA approval in May.This approval is a milestone for the company as it marks the first product approval outside the COVID-19 vaccine space. Our model estimate for mResvia sales is pinned at $70 million.
Though this number might seem encouraging to some, it is significantly low when compared to the initial sales of currently marketed RSV vaccines Arexvy and Abrysvo, when they were commercially launched last year by pharma giants GSK plc (GSK - Free Report) and Pfizer (PFE - Free Report) , respectively. This softer sales expectation can be attributed to the restrictive recommendations for this year’s RSV vaccination season issued by the U.S. CDC in June, combined with the presence of both the GSK and Pfizer vaccines in the target market space.
Moderna is developing more than 40 mRNA-based investigational candidates in different stages of clinical studies, targeting various indications, including cancer. Management is evaluating multiple candidates in late-stage studies — mRNA-1647 [cytomegalovirus (CMV) vaccine], mRNA-1010 (influenza vaccine), mRNA-4157/V940 [individualized neoantigen therapy (INT)] and mRNA-1083 (COVID-19 plus influenza combination vaccine).
An important candidate garnering investor attention is mRNA-4157, an investigational INT being developed in collaboration with Merck (MRK - Free Report) . Moderna and Merck are evaluating mRNA-4157 in three pivotal phase III studies — one in melanoma indication and the other two in the non-small cell lung cancer (NSCLC) space. Since the onset of this year, Moderna and Merck have also started three new clinical studies evaluating mRNA-4157 across cutaneous squamous cell carcinoma (CSCC), renal cell carcinoma and muscle-invasive bladder cancer indications. Investors would likely seek an update from management on the cancer therapy’s clinical development across these studies.
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 stock at present.
MRNA’s Stock Price Performance & Valuation
Year to date, Moderna’s shares have plunged 46.2% against the industry’s growth of 14.0%. The stock has also underperformed the sector as well as the S&P 500.
MRNA Stock Underperforms Industry, Sector & S&P 500
From a valuation standpoint, Moderna appears attractive compared to the industry. Going by the price/sales (P/S) ratio, the company’s shares currently trade at 4.07, trailing 12-month sales value, lower than 6.90 for the industry.
Our Investment Thesis on MRNA Stock
Though Moderna’s top line 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 June 2024-end, Moderna had cash, cash equivalents and marketable securities totaling approximately $10.8 billion. This cash should also enable the company to support its growth plans over the next few years.
We like the company’s recently announced portfolio prioritization and cost efficiency program. It provides investors with an assurance that management is now looking at the longer picture. Instead of fixating solely on R&D, Moderna aims to improve its top line by focusing on products that are either nearing approvals or already on the market.
Management intends to launch 10 new marketed products over the next three years. To achieve this goal, it intends to submit three regulatory filings seeking the FDA’s approval before this year’s end. This includes fresh regulatory filings for mRNA-1283 (next-generation COVID-19 vaccine) and mRNA-1083. Moderna also plans to file a regulatory filing for mResvia seeking label expansion for use in high-risk adults aged 18-59 years.
To accelerate the regulatory timeline for these three filings, the company intends to support each of them with a priority review voucher. Using these vouchers reduces the FDA’s review period for each filing by four months. These launches should help Moderna further diversify its revenue stream.
Stay Invested in MRNA Stock
No matter how the third quarter results play out, we believe that this Zacks Rank #3 company exhibits growth potential based on its strong cash balance and robust pipeline progress. As the stock currently trades at a discount to the industry, we recommend investors to add Moderna to their portfolio. Any major decline in the company’s share price could be an ideal investment opportunity for long-term investors.