Analysts Just Shipped A Meaningful Upgrade To Their Moderna, Inc. (NASDAQ:MRNA) Estimates
Shareholders in Moderna, Inc. (NASDAQ:MRNA) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. The analysts greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals. The market seems to be pricing in some improvement in the business too, with the stock up 8.9% over the past week, closing at US$76.05. Whether the upgrade is enough to drive the stock price higher is yet to be seen, however.
After this upgrade, Moderna's 13 analysts are now forecasting revenues of US$5.5b in 2021. This would be a huge improvement in sales compared to the last 12 months. Losses are expected to turn into profits real soon, with the analysts forecasting US$2.81 in per-share earnings. Before this latest update, the analysts had been forecasting revenues of US$4.4b and earnings per share (EPS) of US$1.99 in 2021. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.
See our latest analysis for Moderna
Although the analysts have upgraded their earnings estimates, there was no change to the consensus price target of US$93.13, suggesting that the forecast performance does not have a long term impact on the company's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Moderna, with the most bullish analyst valuing it at US$136 and the most bearish at US$41.00 per share. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how think this business will perform. As a result it might not be possible to derive much meaning from the consensus price target, which is after all just an average of this wide range of estimates.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Moderna's past performance and to peers in the same industry. One thing stands out from these estimates, which is that Moderna is forecast to grow faster in the future than it has in the past, with revenues expected to grow many times over. If achieved, this would be a much better result than the 22% annual decline over the past three years. Compare this against analyst estimates for the wider industry, which suggest that (in aggregate) industry revenues are expected to grow 20% next year. Not only are Moderna's revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.
The Bottom Line
The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for next year. They also upgraded their revenue estimates for next year, and sales are expected to grow faster than the wider market. Some investors might be disappointed to see that the price target is unchanged, but we feel that improving fundamentals are usually a positive - assuming these forecasts are met! So Moderna could be a good candidate for more research.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for Moderna going out to 2024, and you can see them free on our platform here..
Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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