Moderna (MRNA) drew fresh attention after completing a US$2.6b zero coupon convertible notes offering due 2032 and separately announcing an additional US$2b 2032 convertible notes issue, both placed under Rule 144A.
Moderna's recent completion of zero coupon notes and the additional 2032 convertible announcement come after a surge in momentum, with the share price delivering a 30 day return of 158.73% and a year to date share price return of 371.65%, while the 1 year total shareholder return is very large at 4.79x despite a long term 5 year total shareholder return decline of 67.61%.
Seize this momentum in Moderna and compare it with a curated group of other high growth stories drawn from our 19 high quality undiscovered gems .
After Moderna's share price move and fresh convertible issuance, the temptation is to jump in quickly rather than wait for a pullback. How does today's valuation compare with the company's current fundamentals and risks?
Most Popular Narrative: 229% Overvalued
At a last close of $145.55 versus a narrative fair value of $44.25, the most widely followed Moderna narrative frames the current share price as demanding a lot from future execution while still crediting the mRNA platform with meaningful potential.
The dramatic expansion and advancement of Moderna's mRNA pipeline beyond COVID-19 including recent positive late-stage data and upcoming filings for flu, RSV, CMV, oncology, and rare diseases are likely to diversify the revenue base, capitalize on the rising global burden of infectious and chronic diseases, and materially boost future top-line growth.
Want to understand why this narrative still calls Moderna overvalued even with that growth story in play? The answer sits in how revenue, margins and future earnings multiples are wired together behind that $44.25 fair value. The numbers behind those assumptions may surprise you.
Result: Fair Value of $44.25 (OVERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, the narrative could still be challenged if COVID and flu vaccine uptake disappoints, or if regulatory scrutiny limits how quickly Moderna can translate pipeline progress into revenue.
Find out about the key risks to this Moderna narrative.
Next Steps
Given the mix of enthusiasm and concern around Moderna right now, it helps to move quickly and test the narrative against your own research using the 1 key reward and 1 important warning sign .
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include MRNA .
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