What to look for from MRNA

Key to take away

  • Analysts estimate the adjusted EPS of – $ 0.22 versus – $ 0.31 in Q4 FY 2019.
  • Investors expect optimistic guidelines for the first quarter of 2021, which will be boosted by increasing sales of the COVID-19 vaccine.
  • Revenue is expected to rise sharply in Q4 FY 2020.

Modern Inc. (MRNA), a young biotechnology company focused on drug and vaccine development based on messenger RNA, has posed great attention over the past year for its role in the development of the COVID-19 vaccine. Until mRNA-1273, Modern’s coronavirus vaccine, the company never launched an approved drug on the market.UIt will now soon generate huge profits from the vaccine that millions of people around the world are desperately waiting for.

Investors will watch the sale of mRNA-1273 boost Moderna’s financial results when the company reports earnings on February 25, 2021 for Q4 FY 2020.UAnalysts expect Moderna to make another adjusted loss per share, albeit the smallest quarterly adjusted loss in at least three and a half years, a period when it never made a profit. Revenue is expected to jump from a quarter a year ago.UU

Investors will also focus on whether Moderna will provide guidance for the first quarter of 2021, and if so, what the expected impact of the sale of mRNA-1273 will be on overall financial results. The US Food and Drug Administration (FDA) approved the vaccine of this company only at the end of last year, which means that most of the sales will be realized starting in 2021.UAnalysts are extremely optimistic and forecast a profitable first quarter of 2021 while revenues will grow.UU

Shares of Moderna, which first began public trading in late 2018, have jumped in the last year. The extremely rapid growth of shares was driven by investor optimism about the development of its coronavirus vaccine, which the company first started working on in January 2020.UAfter early data in mid-November showed that the effectiveness of the vaccine was as high as 94.5%, the growth of stocks accelerated before the peak in early December.UThe stock returned some of those gains even as the U.S. government gave approval for the emergency use of the Modern (EAU) vaccine in mid-December. Then the shares continued their upward momentum to new highs. Shares of Moderna have secured 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 stocks are relatively insensitive to weak reports of Moderna earnings in recent quarters, and have instead been driven by optimism about future profitability generated by vaccine sales. The company reported a adjusted loss per share of $ 0.53 in the third quarter of 2020. Revenue grew by 826.4%, representing the second consecutive quarter of growth.UHowever, total revenue was mainly driven by an increase in grant revenue, primarily due to the company’s agreement with the Directorate for Biomedical Advanced Research and Development (BARDA) regarding the development of mRNA-1273.UU

In Q2 FY 2020, Moderna posted a adjusted loss of $ 0.24 per share. Revenue increased by 407.2%, the first increase since Q3 FY 2018. The company said the increase in total revenue could be attributed to an increase in both collaboration revenue and grant revenue.UThe growth in cooperation income is mainly the result of cooperation with AstraZenec PLC (AZN). The increase in grant revenues could primarily be attributed to the aforementioned BARDA agreement relating to the vaccine against COVID-19.UU

Analysts expect a continuous improvement in Moderna’s financial results in Q4 FY 2020. The company is expected to realize a adjusted loss per share of $ 0.22, which would be the smallest adjusted loss in at least 14 quarters. Revenue is expected to grow 2,169.1%, far exceeding any quarterly growth in the past few years. It would also mark the third quarter of revenue growth after six consecutive quarters of revenue decline. For the full-year FY 2020, analysts forecast an adjusted loss per share of $ 1.32, as revenue grows 816.1%. It would be the first year of annual revenue growth from FY 2017.UU

Modern key metrics
Estimate for Q1 2021 (FG) Estimated for Q4 2020 (FY) Q4 2019 (FG) Q4 2018 (FY)
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 carefully seek Modern guidelines for future periods, especially for this Q1 and fiscal year 2021. Moderna has already generated some revenue related to its COVID-19 vaccine, but this was primarily due to grant income from its BARDA agreement. But since its vaccine was only approved in late 2020, Moderna’s revenue growth and overall potential have largely not materialized. In the earnings announcement in Q4 and management comments, investors will seek guidance from Moderna on the size of future revenue and profits. In a report on the company’s third-quarter earnings, CEO Stéphane Bancel said: “I believe that if we launch our COVID-19 vaccine, 2021 could be the most important year of inflation in Modern history.”

Currently, analysts predict that Moderna will report adjusted earnings per share (EPS) of $ 2.42 in the first quarter of 2021. That would be the first quarter of profitability in at least 15 quarters. Revenue is expected to explode upward by 20,848.7% year-on-year due to the use of its jumps against COVID-19 worldwide. For the full-year FY 2021, analysts forecast an adjusted EPS of $ 20.33 as annual revenue grows 2,001.9%. But some analysts say that huge profits may not last forever, as Moderna’s unexpected profit will attract more rivals to the market. Although Moderna was one of the first to develop a coronavirus vaccine, it may need to prepare to protect its significant market share.UU

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