Moderna Now Trades 61% Above Wall Street's Average Price Target. Should You Sell? | The Motley Fool
Moderna (MRNA +14.21%) has been one of the market’s hottest stocks this year, surging more than 500% so far. The biotech stock has delivered these kinds of gains before, soaring more than 2,000% from the start of 2020 through early August of 2021, as its coronavirus vaccine delivered blockbuster revenue. Moderna was one of the stars of early pandemic days, bringing a vaccine to market in a matter of months — a vaccine that would become one of the world’s top-selling pharmaceutical products.
In the years to follow, though, Moderna’s earnings picture and stock performance fell into the doldrums. Demand for the vaccine, its only product at the time, slid in later pandemic days, and Moderna found itself cutting costs to account for this shift. Meanwhile, the company gained other product approvals and advanced its pipeline, but investors didn’t immediately jump on board. In fact, the stock slid in recent years.
This year, however, investors have gotten excited about Moderna again, particularly in response to the progress of its personalized cancer vaccine candidate. That’s supercharged Moderna’s stock performance, and as a result, Moderna now trades 61% above Wall Street’s average price target. Is it time to sell? Let’s find out.
Image source: Getty Images.
Moderna’s mRNA expertise
Moderna, as mentioned, experienced tremendous growth thanks to its first commercialized product, the coronavirus vaccine. At its peak in 2022, it generated more than $18 billion in product revenue. And, importantly, it proved the efficacy of Moderna’s messenger RNA technology, which the company uses across its pipeline. Moderna uses mRNA to teach the body to make certain proteins that protect against or fight certain diseases.
The biotech company has broadened its product portfolio and advanced its pipeline since early pandemic days. Today, it has four commercialized products in the U.S. — two coronavirus vaccines, a flu vaccine, and a vaccine for respiratory syncytial virus (RSV). And it recently won approval in Europe for a combined flu/coronavirus vaccine.
Still, investors didn’t immediately recognize the potential of Moderna beyond its early coronavirus days successes, and the stock slid 83% over the past three years.
This year, however, has marked a clear turnaround. Investors have cheered the progress of Moderna’s personalized cancer vaccine and rushed to get in on the stock. Moderna is investigating the candidate in about 10 clinical trials, with the most advanced in phase 3. And just recently, Moderna said that its candidate, intismeran autogene, paired with Merck‘s Keytruda, met endpoints for recurrence-free survival and survival without cancer spreading to distant organs in a melanoma trial. Based on data from this phase 3 trial, Moderna says it will speak with regulators about filing submissions.
Moderna’s tremendous gain
Much of Moderna’s gain for this year came after the release of that data.
Today’s Change
(14.21%) $28.00
Current Price
$225.00
Key Data Points
Market Cap
Day’s Range
$197.17 – $225.00
52wk Range
$22.28 – $225.00
Volume
28.9M
Avg Vol
18.1M
Gross Margin
12.57%
Now, let’s return to our question: With Moderna now trading significantly above Wall Street’s average price target, is it time to sell the stock? Considering Moderna’s massive gain so far this year, I wouldn’t be surprised to see the stock stagnate or pull back at a certain point. It may have climbed too far, too fast.
That said, Moderna’s long-term story remains bright. While some of the good news may be priced in at today’s levels, this biotech company is in the early days of its growth. The company’s personalized vaccine is being studied across various types of cancer, so it could eventually be used for a broad range of patients. It is important to keep in mind, however, that personalized vaccines aren’t as easy to produce at scale as a treatment that isn’t personalized. So even product approval here may not drive rapid growth.
Moderna’s pipeline is strong, however, and could progressively transform this company into a biotech giant, with a wide range of products across treatment areas and a strong earnings picture. So the stock holds growth potential over time.
What should you do now? If you’ve held Moderna shares for a while and aim to lock in some gains, potentially to expand into other stocks or sectors, now may be a good time to do so. As I mentioned above, the stock could take a pause after its tremendous gain this year. But over time, as Moderna launches new products and advances its pipeline, the stock should have plenty of room to run — so overall, it is still a fantastic biotech player to own.
