Is Moderna A Buy Or Sell After Facing Down Omicron In Critical Test?

 Moderna stock toppled in December despite promising test results for its Covid booster shot against the omicron variant.

In testing against a lab-created version of omicron, Moderna's (MRNA) booster led to a 37-fold increase in virus-blocking antibodies. The booster shot is a half-sized dose of the full vaccine. A third dose of the full vaccine resulted in an 83-fold jump in neutralizing antibodies.

The company is also testing several other options against omicron, including a combination booster that targets multiple variants and an omicron-specific shot.

Despite the promising test results, Moderna stock fell. The omicron variant contains multiple changes to its spike protein that lower the effectiveness of vaccines from Moderna and Pfizer (PFE). Both companies say a booster dose increases antibody levels against omicron.

The biotech is also working on a flu shot. In a recent study, Moderna's flu vaccine generated a similar level of antibodies as a popular vaccine from Sanofi (SNY), and Moderna stock fell. The company says the flu shot could be added to other vaccines protecting against respiratory diseases.

So, all in all, is Moderna stock a buy or a sell today?

A Fundamental Look At Moderna Stock

The biotech company is banking on its messenger RNA, or mRNA, technology. Messenger RNA is a substance in the body that delivers the instructions for creating protein.

So-called spike proteins cover the type of coronavirus that causes Covid-19. Moderna's vaccine contains mRNA that tells the body to produce a structure similar to the spike protein. The idea is that this will trigger the immune system to create disease-fighting antibodies and T-cells.

Moderna now has three quarters of profitability. In the third quarter, Moderna earned $7.70 a share on $4.97 billion in sales. The latter number includes $4.81 billion in sales of its Covid vaccine. Both measures lagged expectations, though grew bullishly.

The revenue growth was massive and profits are bullish, though it's still early innings. CAN SLIM investors are encouraged to seek stocks with recent 20%-25% quarterly revenue and earnings growth. The bigger that growth, the better.

In the fourth quarter, analysts polled by FactSet expect Moderna to earn $8.70 per share on $5.98 billion in sales. Earnings would turn around from year-earlier losses and sales would grow by a triple-digit percentage.

Moderna stock has a Composite Rating of 63 out of a best-possible 99. The Composite Rating is a measure of a stock's key fundamental and technical measures. So MRNA stock ranks below the top one-third of all stocks on those measures.

What Does 2020 Say About MRNA Stock?

Moderna stock went public at 23 in late 2018.

In 2019, the biotech stock popped about 38%. In 2020, though, shares rocketed more than 434%.

Still, the bullish Moderna stock action does not extend to fundamental measures. In 2020, Moderna reported a loss of $1.96 per share on $803 million in sales. Sales soared, but losses deepened.

Moderna also just cut its outlook for 2021. Now, the company expects $15 billion to $18 billion in full-year sales of its Covid shot. That lagged analysts' projections and MRNA stock tumbled.

The company also cut its expectations for production in 2021 to 700 million to 800 million doses, down from its prior outlook for 800 million to 1 billion.

In 2021, analysts expect Moderna to earn $26.42 per share on $17.49 billion in sales. Earnings would swing from year-ago losses and sales would soar by a quadruple-digit percentage.

Moderna Stock: Technical Analysis

Moderna stock isn't currently forming a chart pattern, according to MarketSmith.com. Investors are encouraged to take buy a stock when it tops a buy point.

Bearishly, Moderna stock has dropped below its 50-day and 200-day moving averages as of Dec. 28.

Shares have a Relative Strength Rating of 92. The RS Rating is a 1-99 measure of a stock's 12-month performance. This puts Moderna stock in the top 8% of all stocks on that metric.

But MRNA stock has a poor EPS Rating of 68, still reflecting years of per-share losses.

Covid Vaccine Facing Competition

Moderna has finished submitting data to the FDA to secure full approval for its coronavirus vaccine. The vaccine from Pfizer and its partner, BioNTech (BNTX), is already fully approved for people age 16 and older. This means the companies can market to consumers and change the price.

Recently, Moderna submitted initial data to the FDA and the European Medicines Agency for its Covid booster shot. The FDA and Centers for Disease Control and Prevention just authorized the Covid booster for all adults six months after finishing their primary series. Johnson & Johnson (JNJ) recipients can get a booster two months after their first shot.

But the FDA is holding off on making its decision on the Moderna shot in teens to investigate the potential tie between the messenger RNA vaccines and heart inflammation in young people. As part of their approval, Pfizer and BioNTech will continue to study that potential side effect in their vaccine.

The firm also unveiled promising results for a half-sized dosage of its vaccine in children age 6-11. Children produced a comparable level of antibodies to what the company saw in young adults. Further, side effects were in line with what the company has seen in teens and adults. Moderna is still enrolling children below the age of 6 in the ongoing study.

So, Is Moderna Stock A Buy Or Sell Right Now?

Moderna stock isn't a buy right now. Shares aren't forming a definitive chart pattern.

The company has managed to put together strong sales growth. Analysts expect that to continue in the future. Further, they see the company as solidly profitable in the near future. But analysts call for both metrics to decline in 2022.

Shares have a strong RS Rating, but the company's Composite Rating is below the upper echelon of stocks.

It will be important to watch Moderna's efforts to distribute its coronavirus vaccine. That could help stoke both MRNA stock and the biotech company's financials.

https://www.investors.com/news/technology/mrna-stock-buy-now/