What to look for in mRNA

Key takeaways

  • Analysts estimate an adjusted EPS of – $ 0.22 versus – $ 0.31 in the fourth quarter of fiscal 2019.
  • Investors anticipate an optimistic future direction for the first quarter of fiscal 2021 driven by increasing sales of the COVID-19 vaccine.
  • Revenues are expected to increase sharply in the fourth quarter of fiscal 2020.

Moderna Inc. (MRNA), the young biotech company focused on developing messenger RNA-based drugs and vaccines, has attracted a lot of attention over the past year for its role in developing a vaccine against COVID-19. Until the mRNA-1273, Moderna’s coronavirus vaccine, the company had never released an approved drug.Now, you are about to reap huge benefits from a vaccine that millions of people around the world are desperately waiting for.

Investors will watch as sales of mRNA-1273 bolster Moderna’s financial results when the company reports earnings on February 25, 2021 for the fourth quarter of fiscal 2020.Analysts expect Moderna to post another adjusted loss per share, albeit the smallest adjusted quarterly loss in at least three and a half years, a period in which it never made a profit. Revenues are expected to skyrocket compared to the prior year quarter.

Investors will also focus on whether Moderna will provide future guidance for the first quarter of fiscal 2021 and, if so, what the expected impact of the sales of mRNA-1273 will be on the overall financial results. The company’s vaccine was only approved by the US Food and Drug Administration (FDA) late last year, which means that the majority of sales will be generated starting in 2021.Analysts are extremely bullish, forecasting a profitable Q1 FY 2021 as revenue continues to rise.

Moderna’s shares, which went public in late 2018, have soared over the past year. The stock’s exceptionally rapid rise has been fueled by investor optimism about the development of its coronavirus vaccine, which the company began work on in January 2020.After the first data in mid-November showed that the vaccine’s efficacy rate reached 94.5%, the population growth accelerated rapidly before reaching its peak in early December.The action returned some of those gains even as the US government granted the Emergency Use Authorization (UAE) of the Moderna vaccine in mid-December. The stock then resumed its bullish momentum to new highs. Moderna’s stock has provided a total return of 757.3% over the past 12 months, well above the S&P 500’s total return of 20.2%.

Source: TradingView.

The stock has been relatively unresponsive to Moderna’s weak earnings reports in recent quarters, driven instead by optimism about future profitability generated by vaccine sales. The company reported an adjusted loss per share of $ 0.53 in the third quarter of fiscal 2020. Revenues increased 826.4%, marking the second consecutive quarter of growth.However, total revenues were primarily driven by increases in grant income, primarily due to the company’s agreement with the Advanced Biomedical Research and Development Authority (BARDA) related to the development of mRNA-1273.

In the second quarter of fiscal 2020, Moderna posted an adjusted loss of $ 0.24 per share. Revenue increased 407.2%, the first increase since the third quarter of fiscal 2018. The company said the growth in total revenue was attributed to increases in both collaboration income and grant income.Collaboration revenue growth was primarily due to a collaboration with AstraZeneca PLC (AZN). The increase in grant income was primarily attributed to the previously mentioned BARDA deal related to the COVID-19 vaccine.

Analysts expect continued improvement in Moderna’s financial results in the fourth quarter of fiscal 2020. The company is expected to post an adjusted loss per share of $ 0.22, which would be the smallest adjusted loss in at least 14 quarters. Revenues are expected to increase 2,169.1%, far exceeding the quarterly growth figures of recent years. It would also mark the third quarter of revenue growth after six consecutive quarters of revenue declines. For the full fiscal year 2020, analysts are forecasting an adjusted loss per share of $ 1.32 as revenue rises 816.1%. It would be the first year of annual revenue growth since fiscal 2017.

Moderna key metrics
Estimate for the first quarter of 2021 (fiscal year) Estimate for the fourth quarter of 2020 (fiscal year) Fourth quarter of 2019 (fiscal year) Fourth quarter of 2018 (fiscal year)
Adjusted earnings per share ($) 2.42 -0.22 -0.31 -0.88
Income ($ M) 1,757.4 318.9 14.1 35.4

Source: Visible Alpha

As mentioned above, investors will also be on the lookout for Moderna’s future direction for future periods, especially the current fiscal year Q1 and 2021. Moderna has already generated some revenue related to its COVID-19 vaccine, but that was primarily due to to grant income from your BARDA agreement. But since its vaccine only received US approval in late 2020, Moderna’s revenue growth and overall growth potential have largely been unrealized. In the fourth quarter earnings announcement and management commentary, investors will seek guidance from Moderna on the magnitude of future earnings and earnings. In the company’s third-quarter earnings report, CEO Stéphane Bancel said: “I believe that if we launch our COVID-19 vaccine, 2021 could be the most important turning year in Moderna’s history.”

Analysts currently forecast Moderna to report adjusted earnings per share (EPS) of $ 2.42 in the first quarter of fiscal 2021. It would be the first quarter of profitability in at least 15 quarters. Revenue is expected to skyrocket 20,848.7% compared to the prior year quarter, as use of its COVID-19 vaccine increases worldwide. For the full fiscal year 2021, analysts are forecasting adjusted EPS of $ 20.33 as annual revenue soars 2,001.9%. But some analysts say those high profits may not last forever because Moderna’s windfall may draw more rivals into the market. While Moderna is one of the first to develop a coronavirus vaccine, it may need to prepare to protect its considerable market share.

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