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Moderna Stock May Still Be Undervalued by 30%, Says Analyst

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Moderna (MRNA) has been one of the past year’s most successful stories. The change between the high-flying biotech’s standing a year ago compared to its current position, was easy to tell in the company’s latest quarterly statement.

In 4Q20, Moderna delivered revenue of $571 million, a far cry from the $14 million in sales it reported in the same period last year. The figure also came in well ahead of the Street’s call for $279.4 million.

Of course, the massive change was due to the sales of its Covid-19 vaccine mRNA-1273, which was granted Emergency Use Authorization (EUA) in December. The vaccine generated sales of almost $200 million.

On the other hand, the company’s losses deepened. EPS of -$0.69 was worse than 4Q19’s net loss of $0.37 per share and missed the estimates by $0.28.

Investors, however, didn’t mind the last bit, due to the company’s outlook for the rest of the year. Specifically, for the continued success of its Covid-19 vaccine, which is expected to generate more revenue than initially anticipated.

As of February 24, Moderna’s signed Advance Purchase Agreements (APAs) for its vaccine are expected to generate ~$18.4 billion, compared to the ~$11.7 billion expected back in the beginning of the year. The new figure is based on growing demand and on Moderna producing more doses. The company raised the lower end of its FY21 target from 600 million to 700 million. By 2022, Moderna expects to produce 1.4 billion doses.

With eight commercial subsidiaries now established in North America/EU and a global presence set to expand further, Oppenheimer analyst Hartaj Singh believes the outlook is very bright indeed.

“We are witnessing a company scaling/speeding up in an unprecedented manner, further fueling to MRNA's scarcity value," the 5-star analyst said. "We continue to see mRNA-1273 possessing the best-in-class profile, with additional efforts (mutations/age groups/ storage, etc.) further differentiating its profile. In our opinion, with a platform technology, the translation of mRNA-1273's success into its pipeline candidates should not be overlooked, a key factor sustaining further re-rating.”

Unsurprisingly, Singh rates MRNA an Outperform (i.e. Buy) along with a $106 price target. Therefore, the analyst expects gains of ~30% over the next 12 months. (To watch Singh’s track record, click here)

What does the rest of the Street think? Looking at the consensus breakdown, opinions from other analysts are more spread out. 6 Buys, 5 Holds and 2 Sells add up to a Moderate Buy consensus. In addition, the $170.92 average price target indicates ~9% upside potential. (See MRNA stock analysis on TipRanks)

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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.