Please ensure Javascript is enabled for purposes of website accessibility
Free Article Join Over 1 Million Premium Members And Get More In-Depth Stock Guidance and Research

Are Coronavirus Vaccine Stocks Too Expensive?

By Keith Speights - Oct 26, 2020 at 6:10AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

It's important to look at the big picture.

As the development of coronavirus vaccine candidates has moved along, the share prices for several of the companies making these vaccines have soared. Some coronavirus vaccine stocks have more than tripled so far this year. In this Fool Live video, Healthcare and Cannabis Bureau Chief Corinne Cardina and longtime Motley Fool contributor Keith Speights talk about whether or not coronavirus vaccine stocks are now too expensive and if there are any bargains still to be found. 

Corinne Cardina: A little bit more on valuation. We've seen investors really bid up a lot of these stock prices since February, March. Moderna ( MRNA 0.03% ) was trading in the 20s and 30s back in March, now it is $78. Do you have any thoughts on any of these stocks that are really astronomically overvalued, are there any that are fairly valued or even trading at a bargain today?

Keith Speights: Yeah, I'm actually asked that question on Twitter quite frequently.

Corinne Cardina: The people want to know, Keith!

Keith Speights: Yeah! Is Moderna overpriced? Yeah. I think in some ways you could say stocks like Moderna might be overpriced, but I do think investors need to look at the bigger picture there.

If Moderna's COVID vaccine is successful then I think the value of its entire pipeline increases. Because if mRNA works well with the coronavirus, I think it's going to be a good candidate for use in other vaccines, as well as things like treating cancer and other things. My personal opinion is that Moderna is a pricey stock, but if it's successful, it's not overvalued. Now, if its vaccine doesn't pan out, then that stock is going to collapse.

In terms of stocks that might be undervalued. I think Novavax's ( NVAX 3.30% ) potential -- again, it's a highly risky stock, it's depending on success for its coronavirus vaccine. but Novavax also has another vaccine that has a lot of promise: nanoparticle-based influenza vaccine called NanoFlu. I think Novavax is a stock that could really go up if it's successful.

And in terms of just being a bargain, you might say Pfizer ( PFE 1.39% ) is a relative bargain. Pfizer hasn't had a great growth story over the last couple of years or so, but it's about to spin off its Upjohn unit and merge it with another company. I think that's going to pave the way for better growth for Pfizer. I think Pfizer arguably could be considered a little undervalued right now.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Pfizer Inc. Stock Quote
Pfizer Inc.
PFE
$52.12 (1.39%) $0.72
Novavax, Inc. Stock Quote
Novavax, Inc.
NVAX
$187.74 (3.30%) $5.99
Moderna, Inc. Stock Quote
Moderna, Inc.
MRNA
$283.48 (0.03%) $0.08

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
652%
 
S&P 500 Returns
145%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 12/09/2021.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Our Most Popular Articles

Premium Investing Services

Invest better with the Motley Fool. Get stock recommendations, portfolio guidance, and more from the Motley Fool's premium services.