Moderna Inc (MRNA, Financial) has experienced a daily gain of 2.09%, yet the past three months have seen a notable decline of 22.5%. With an eye-catching Loss Per Share of $9.35, investors are questioning whether the stock is modestly overvalued. Our valuation analysis aims to provide clarity on Moderna's current market standing, inviting readers to delve into the comprehensive financial scrutiny that follows.
Company Introduction
Founded in 2010, Moderna Inc (MRNA, Financial) swiftly validated its mRNA technology with the authorization of its COVID-19 vaccine in the United States in December 2020. With a diverse portfolio of 39 mRNA development candidates across various therapeutic areas, Moderna's commercial-stage biotech prowess is evident. The stock's current price of $82, with a market cap of $31.30 billion, prompts an evaluation against the GF Value of $71.83 to determine its fair market value.
Understanding the GF Value
The GF Value is a proprietary metric that assesses the intrinsic value of a stock, factoring in historical trading multiples, a GuruFocus adjustment for past performance, and future business projections. This value serves as a benchmark, suggesting that a stock priced significantly above this line may be overvalued, while one below may offer higher future returns. Moderna (MRNA, Financial), with its current price hovering above the GF Value, appears to be modestly overvalued, potentially leading to lower long-term returns relative to its business growth.
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Financial Strength and Stability
When considering an investment, the financial strength of a company is crucial to minimize the risk of capital loss. Moderna's cash-to-debt ratio stands at 5.21, placing it in a precarious position within the Biotechnology industry. Despite this, its financial strength has been rated a fair 7 out of 10 by GuruFocus.
Profitability and Growth Prospects
Profitability is a key indicator of a company's investment safety. Moderna has demonstrated profitability over the past decade, with a revenue of $9.10 billion in the last twelve months. However, its operating margin of -29.32% reveals challenges, although it fares better than many in the industry. The company's growth, with a staggering 3-year average annual revenue growth rate of 578.9%, outshines most competitors, but its EBITDA growth raises concerns.
The Significance of ROIC vs. WACC
An essential profitability measure is the comparison between Return on Invested Capital (ROIC) and Weighted Average Cost of Capital (WACC). Moderna's ROIC of -28.71 against a WACC of 11.4 suggests the company is currently not generating sufficient returns on its investments.
Conclusion
In summary, Moderna (MRNA, Financial) is deemed modestly overvalued based on our analysis. The company's financials are fair, but profitability remains a concern. Its growth outpaces many peers, yet profitability metrics show room for improvement. For a deeper insight into Moderna's financials, you can explore its 30-Year Financials here.
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This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
