Moderna Has Rallied Over 200% YTD; Is There More Upside Left?

Stock Market

Moderna (MRNA) is one of those names that received a great deal of public attention due to the virus over the past year and a half. Though the biotech company has been in existence for about 10 years, Moderna’s COVID-19 vaccine pushed it into the spotlight.  

The resurgent virus and strong global demand for its COVID-19 vaccine turned Moderna profitable, while its stock price skyrocketed over 434% in 2020. Furthermore, it has gained approximately 210% this year. (See Moderna stock charts on TipRanks)

Adding to investors’ optimism is its $19.2 billion worth of advance purchase agreements (APAs) for 2021. Moreover, it has signed several supply agreements for next year and increased its capacity to supply 3 billion doses in 2022. 

As Moderna’s market capitalization zoomed past $100 billion with its stock joining the S&P 500, one might ask whether there is more upside left. 

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TipRanks’ Stock Investors tool shows that investors have a ‘Very Positive’ outlook on Moderna stock, with 2.9% of investors tracked on TipRanks increasing their exposure in the last 30 days. Furthermore, TipRanks data shows that financial blogger opinions are 87% Bullish, compared to a sector average of 70%. Also, hedge funds reflected on TipRanks increased their holdings by a cumulative 1.2 million shares during the last quarter.

Moderna’s prospects look strong with its robust APAs and positive indicators from investors, financial bloggers, and hedge fund managers. However, its valuation is a cause of concern. In a note to investors, Jefferies analyst Michael Yee said, “We see 2021 guidance increasing to $21B from $19B and expect positive commentary around boosters in development (potentially Delta next) and preparing for 2022 orders.” 

However, with the significant growth in Moderna’s stock price, the analyst has a Hold rating on the stock “based on valuation.” Furthermore, his price target of $250 represents downside potential of 22.7%. 

Besides its stretched valuation, the uncertainty over booster shots could play spoilsport. 

Overall, 13 analysts have weighed in on Moderna shares in the past three months, giving the stock 7 Buys, 4 Holds, and 2 Sells for a Moderate Buy consensus rating. The average Moderna price target of $206.55 implies approximately 36.2% downside potential to current levels. 

Disclaimer: The information contained herein is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities.

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