Moderna up 15% on strong earnings…

This is only the fourth quarter with earnings. Last year 4th quarter was showing losses. Yahoo Finance showing PE as 9.36. Low PE implies investors expect earnings to fall as the need for Covid vaccine wanes. Moderna has commitments for billions more in sales and thinks booster shots will continue to be needed.

Meanwhile new products are in the works. Over 40 in various stages of development.


Here’s a slightly updated version of what I posted earlier today on the BRK board about Moderna. Note the ~9 PE shown on Yahoo doesn’t include today’s earnings.

Earnings released this morning were great. $11.29/share (vs. $9.90 expected) gives trailing twelve month net diluted income of $28.29 and a trailing PE of 5.5 at closing price today of $156.23/share. They raised revenue forecasts for 2022 and predict the Covid vaccine will stay a great money maker for years to come as they expect Covid to become an endemic disease with recommended annual shots like the flu. Once they judge the disease has transitioned from pandemic to endemic, they will be raising the price on their vaccine.

Shares are up 15% today, still look like an incredible value, IMO, at $156/share 5.5 PE and it looking likely they can repeat or improve on those earnings this year.

Kingran commented in a prior post, noting Moderna’s high cash balance after the strong earnings of recent quarters: Empire building has destroyed many companies. What they are going to do with their cash is the key.

Yeah, there are plenty of ways things could go sour. I like that they announced up to $3 billion in stock buybacks this morning, given I find the price so attractive.

They now have 44 drug/vaccine programs in development including a bivalent Omicron/Covid vaccine. Phase 1 of their flu vaccine went well and Phase 2 is fully enrolled. They announced a new program for a Herpes Simplex therapeutic vaccine, which would be huge if successful, and also a new program for a cancer vaccine that seeks to address specific checkpoints that cancers exploit in their growth. They are working on two different HIV vaccines, an Epstein-Barr virus vaccine and therapeutic vaccine (mononucleosis and increased risk of multiple sclerosis). Numerous other important programs in development include cancer inhibition and heart disease therapeutics.

Revenue last year was $18.5 billion and they already have $19 billion in advanced purchase agreements in place for 2022 with another $3 billion in options and ongoing active discussions for further orders. Expenses will be going up as their tax rate, administrative expenses and R&D all increase, but initial rough estimates indicate they should net as much or more next year as this year. They already have firm orders for 2023 Covid vaccines from 4 countries. They are building a global commercial network to support sales without partnering with a major pharmaceutical.

Tying this in to METAR a bit, Moderna’s success is a glimmer of what is coming down the pike from biotech advances, which I think will be a huge macro trend in coming decades. Moderna seems well positioned to further capitalize on their cutting edge biotech.