Is Moderna Stock A Buy After FDA Signs Off On Its Updated Covid Shot?

 Moderna stock remains under pressure despite winning authorization for its omicron-blocking booster shots in three global regions, including the U.S.

Regulators in the U.K. signed off on Moderna's (MRNA) updated Covid booster. This shot aims to block infections caused by the BA.1 strain of omicron. Meanwhile, officials in the U.S. and Europe allowed boosters targeting the more current BA.4 and BA.5 subvariants.

Bullishly, Moderna reported unexpected sales growth in the second quarter. Sales of the Covid vaccine called Spikevax grew 8% to $4.53 billion. Analysts expected a sales decline of 9% to $3.83 billion. The results sent Moderna stock soaring for two days, then shares quickly hit the skids.

Moderna also won FDA authorization for its Covid vaccine in children as young as 6 months old. Officials in Canada and Australia followed suit this month. Further, advisors to the European Medicines Agency recommended Moderna's booster shot for adolescents age 12-17.

Still, 2022 is the last year of growth for Moderna stock that analysts predict until 2025. Moderna expects $21 billion in purchase agreements for its two-shot vaccine. But in 2023, analysts call for sales to fall by half to roughly $10.2 billion.

Importantly, Moderna is working to expand its non-Covid offerings. In July, Moderna dosed the first participant in a study of its Nipah virus vaccine. Nipah is a respiratory illness. The company also dosed the first person in a study of its seasonal flu vaccine.

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

A Fundamental Look At Moderna Stock

By all measures, the second quarter represented a beat for Moderna. The company earned $5.24 per share, down 19%. But analysts called for a deeper decline to $4.58 per share. Overall sales grew 9% to $4.75 billion. That was better than calls for a 6% decline.

In addition to $4.53 billion from Spikevax, Moderna reported a smaller amount of collaboration money and grants.

But Moderna's second-quarter sales and earnings didn't line up with CAN SLIM advice. Investors are advised to seek companies with at least 20%-25% recent earnings growth.

Now, the question for Moderna stock remains how long it can sustain growth. Analysts currently expect sales to plummet in 2023 as Covid reaches the endemic stage. In the third quarter, analysts expect Moderna to earn $4.81 per share on $4.63 billion in sales. Earnings would decline 38% and sales would inch down 7%.

Moderna stock has a Composite Rating of 44 out of a best-possible 99. The Composite Rating is a measure of a stock's key fundamental and technical measures. So MRNA stock tops 44% of all stocks on that metric.

What Do Annual Metrics Say?

Moderna stock went public at 23 in late 2018. In 2020, shares rocketed more than 434%. The gain was less bullish in 2021 with shares rising 143%.

Fundamentals improved in 2021 following the late 2020 launch of Moderna's Covid vaccine. In 2021, Moderna earned $28.29 per share on $18.47 billion in sales. Earnings turned around from a year-earlier loss and sales skyrocketed.

Moderna is also targeting flu, respiratory syncytial virus and cytomegalovirus with vaccines. Further, it's testing treatments for rare diseases and cancer. The company also inked a deal with privately held Carisma Therapeutics in cancer treatment.

The market for Covid boosters also could remain intact for some time. The FDA now allows two rounds of messenger RNA boosters — depending on age and immune conditions. Moderna unveiled promising test results for two omicron boosters, both of which are now authorized in different regions.

Moderna expects $21 billion in sales of its Covid vaccine this year.

Now, MRNA stock analysts project $21.96 billion in 2022 sales and $26.65 in adjusted earnings per share. Sales would rise 19%, but earnings would decline 6%.

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