What’s behind the exploding Moderna share price?
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Moderna (NASDAQ:MRNA) share price has been rising as the company has become a household name. With its Covid-19 vaccine having one of the highest efficacy rates, the demand from individuals and governments alike is high. Even more so now that it turns out, its vaccine is still effective against the new Delta-variant.
Moderna is one of the companies which started the development process of vaccines for Covid-19 at a very stage. It was one of the first to receive regulatory approval from the Food & Drug Administrations (FDA) for its vaccine. Unlike a traditional live vaccine, where the patient is infected with a weaker version of the virus, Moderna’s treatment uses mRNA. This effectively “teaches” the body’s immune system how to fight the virus without ever being infected by it.
So far, the business has managed to produce 100 million doses. But the management team are aiming to deliver up to three billion by 2022. That’s quite the growth opportunity for the Moderna share price. So should I be adding this business to my portfolio? Let’s take a look.
The recent highlights
The Moderna share price has been heading in an upward trajectory this year. So much so that the stock is up nearly 450% in the last 12 months alone. Earlier this week, the firm reached a new all-time high of $433 per share following its latest earnings report.
For the last three months, total revenue came in at a staggering $4.4bn compared to only $67m in 2020. This enormous growth spike was predominantly generated from the sale of its Covid-19 vaccine. A large chunk of vaccines sales is down to its recently signed contract with the European Commission to supply up to an additional 300 million doses by 2022. That’s some pretty extraordinary growth, so I’m not surprised to see the Moderna share price take off.
Moderna Share Price Journey
Moderna shares have sky-rocketed almost three-fold this year. Starting off at $107 on the first day of trading of 2021, Moderna stock is currently trading around $416.
The Moderna share price ride has hardly been smooth. But thanks to its record-breaking operational performance and rapid share price appreciation, it has now been added to the S&P 500 index. This inclusion once again has helped boost the Moderna share price even further.
But whether it can continue to climb has yet to be seen. Almost all of its sudden growth is from its Covid-19 vaccine. This is a little troubling because it’s currently unclear how the management team intends to maintain this growth when the pandemic comes to an end.
The firm does have several other drugs in its pipeline, but most are within phase I trials. Meaning it could be several years before any of these treatments make it to the market. And that’s assuming they receive regulatory approval. If Moderna can’t continue to deliver in a post-pandemic world, then I think its share price could take a substantial hit.
Given a choice, I would opt to have the Moderna vaccine. Whether that’s the best option, only an expert would know. But the fact that the company has built a reputation for excellence amongst consumers is quite impressive in my eyes.
And with the demand for the vaccine continuing to rise worldwide, I don’t think this growth will be slowing down in 2021 or 2022. But what happens after that is anyone’s best guess. But I believe the potential reward is worth the risk. Therefore, I would consider adding Moderna to my portfolio even after its most recent share price surge.
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Covid-19 has devastated the global markets. But this stock has been thriving and has doubled its revenue for the last five years, even in 2020! What's more, due to the recent volatility in the stock market, The Money Cog analysts feel the stock is grossly undervalued.
Needless to say, I believe it's a fantastic business that could become an industry leader in the future!
Saima Naveed does not own shares in any of the companies mentioned. The Money Cog has no position in any of the companies mentioned. Views expressed on the companies and assets mentioned in this article are those of the writer and therefore may differ from the opinions of analysts in The Money Cog Premium services.