Last week, when frenzied buying led to Moderna (NASDAQ:MRNA) trading at a $178.50 intraday high, the stock quickly fell. Though it found support at $140, the over $50 billion valuations may limit Moderna’s upside.
Investors betting on MRNA trading higher will need to rely on strong buying momentum.
Without vaccine shipments beginning, markets are only speculating on the first-year revenue potential from sales of Covid-19 vaccine. Operationally, any delays in worldwide distribution will hurt quarterly sales expectations.
Moderna’s CEO is confident that the company may produce 500 million doses in 2021. At around $30 per dose, the revenue potential is $15 billion annually. And at a $50 billion market cap, the stock is trading at over three times 2021 sales. If countries opt for BioNtech (NASDAQ:BNTX) vaccine, then demand may not increase. Furthermore, AstraZeneca (NYSE:AZN) will target the development market and charge around $5 per dose.
Governments may accept the slightly lower efficacy of AstraZeneca’s vaccine.
Despite the competition ahead for Moderna, the company has vaccine development for other viruses. It is also researching cancer vaccines and intratumoral immune-oncology therapies.
Value investors could buy Regeneron (NASDAQ:REGN) and get more value. AZN is twice the market cap than MRNA and trades at a modest 18x forward P/E. Consider them instead.
