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Is Moderna a Smart Pick for Long-Term Investors?

By Keith Speights - Jan 25, 2021 at 9:03AM

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The biotech stock has plenty of risks, but it also offers the potential for big rewards.

There's no question that Moderna (MRNA -4.97%) has been a big winner for investors. The biotech stock skyrocketed 434% in 2020. But can the company keep the momentum going? 

In this Motley Fool Live video recorded on Jan. 13, 2021, Healthcare and Cannabis Bureau Chief Corinne Jurney Cardina and Fool.com writer Keith Speights discussed whether or not Moderna is a smart pick for long-term investors.

Corinne Cardina: Given all we've talked about, what do you think of Moderna as an investment? Could it be a buy for risk-tolerant investors over the long-term?

Keith Speights: I think so. I do agree that Moderna has shot up a lot and its valuation could seem a little scary, at least at first glance.

However, if the company is realistically looking at, let's say, five or six billion dollars annually. Let's just assume that just to say something here. But let's say it could rely on five or six billion dollars annually from its COVID vaccine going forward. Of course, making a lot more than that this year.

That valuation of under $50 billion isn't too terribly scary for a biotech that also has a platform. They have this ,RNA platform that could be used not only for vaccines, targeting viruses, but also like we were looking at the pipeline for cancer and heart disease and other diseases that aren't even on the radar yet.

I think the potential for Moderna to be a massive long-term winner is certainly there. There's no guarantee that's going to happen. Corinne, let me just say that. The stock might not be as big of a winner as I'm thinking it could be. But in terms of a company that could be 100 million-plus market cap later this decade, I think you'd have to include Moderna as one of the possible candidates there.

So for risk-tolerant investors who are not afraid to maybe have the possibility of losing money, Moderna could be an interesting opportunity.

Corinne Cardina: Definitely. I think if there's one less than we can apply from the tech sector this year. It's don't underestimate the power of the platform and the platform that it's hard to replicate. Just looking at the sheer speed that they came up with the vaccine, got it through trials, got it authorized by the FDA. It bodes pretty well for the management as well.

Keith Speights: It does.

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