Moderna Pharmaceuticals (NASDAQ:MRK) is a biotechnology company focused on the development of new vaccines and diagnostic tests for cancer and infectious diseases. The company has recently announced new strategic partnerships. These include a new high-speed filling line with Catalent that will allow the company to manufacture Covid vaccines faster.
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In addition, French laboratory Sanofi has committed to provide Moderna with 200 million doses of Covid vaccine in the United States. In addition, Moderna has partnered with Roche to provide diagnostic tests for clinical trials. It has also entered a deal with the Gavi Organization to speed up the delivery of 20 million doses of vaccines by 2021.
Despite being a biotech company that has spent hundreds of millions of dollars on developing its mRNA technology, Moderna stock has turned a profit each year for the last 11 years. In 2021, I expect the biotech to report $12 billion in profits. Moderna’s COVID-19 vaccine will be responsible for much of that profit. The company sold 807 million doses of the vaccine last year and expects strong demand for the vaccine this year. It has advanced purchase agreements to purchase an additional $19 billion worth of doses in 2019. The company’s recurring revenues should increase as more people get booster shots.
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After the company released its second-quarter results on Wednesday, Moderna’s stock rose over 3%. The company beat both its revenue and earnings expectations for the second quarter. Its net income for the quarter came in at $2.2 billion, or $5.24 per share, versus a FactSet consensus of $4.58. The company expects to deliver $21 billion in COVID-19 vaccines this year. Moderna has a 65% profit margin.
Moderna’s recent third-quarter sales and earnings fell short of expectations. The company’s revenue was only $5 billion, while analysts had projected $6.2 billion. The company cited supply chain constraints for this shortfall, which dragged down investor sentiment. As a result, Moderna’s stock has dropped dramatically.
The company has a relatively good cash balance, but its operating cash flow has fallen from $2,631 million in the prior-year period. Its free cash flow also fell from $2,631 million to $217 million. Moderna’s cash balance has declined to $7,897 million, which is essentially the same as its cash and equivalents in Q2 2021.
The P/S ratio measures the company’s ability to meet its long-term debt and investment obligations, and is used to estimate Moderna Inc.’s future dividend payments. This approach also measures the company’s profitability, which is the ratio of current earnings to its total assets.
If you are considering buying Moderna stock, it is important to consider how to time the purchase with your own investment goals and risk tolerance. You should consider your existing asset allocation. You want to ensure that your portfolio isn’t too concentrated in one stock, industry, or geographic region. Moderna stock could add to your portfolio or detract from it.
Moderna stock is a great long-term investment, especially since it brings new drugs to the market at record speed. The company has a deep pipeline of potential drugs that use the same mRNA technology as its coronavirus vaccine. While you don’t have to wait for the first candidate to be successful, it would help to be patient and let your money grow.
Transactions to buy shares
A recent SEC filing reveals that Moderna CEO Stephane Bancel has sold more than $40 million worth of Moderna stock. These sales were part of an existing trading plan that Bancel had in place from December 2018 to May 2020. The sales are a small fraction of Bancel’s total holdings. Bancel previously stated that he intended to sell a small portion of his stock.
Before buying Moderna stock, investors should deliberate their goals and risk tolerance. They should also consider their existing asset allocation. They should seek to make a well-diversified portfolio that is not heavily weighted toward any one stock, industry, or geographic region.
Moderna’s shares have rallied since the beginning of July. The stock is trading at a premium to Merck & Co.’s valuation of the company. However, despite this valuation, Moderna’s company requires the sale of 1.5 billion doses of COVID-19 vaccine per year through 2038 for $30 billion in aggregate peak sales. If Moderna’s vaccine is successful, it could become a standard flu vaccine.
The coronavirus vaccine is Moderna’s only commercial product. But Moderna is betting that it will replicate this success in other areas with its mRNA technology. If Moderna can develop and commercialize COVID-19 vaccine before 2025, its stock could make a massive run.