Moderna (MRNA -2.03%) took center stage last spring when it became the first to bring an investigational coronavirus vaccine into human trials. Nine months later, it brought that vaccine to the public after earning an Emergency Use Authorization (EUA) from the U.S. Food and Drug Administration (FDA). The stock climbed more than 430% last year -- rewarding short-term and long-term investors along the way. And the trend continues. Moderna's shares are up 60% so far in 2021.
Now the question is: Can new investors in the stock can still benefit? Or is it too late to get in on this coronavirus vaccine success story? The answer depends on the company's future revenue prospects and position in the vaccine market. And it also depends on a potential investor's investment horizon.
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A big win
Moderna and rival vaccine maker Pfizer (PFE -0.23%) recently celebrated a big win. President Joe Biden ordered enough of both vaccines to fully immunize the entire U.S. population, meaning it will be difficult for another company to break into the U.S. market in a big way -- unless that company offers a superior product.
So, Moderna and Pfizer command leading positions in the U.S. And of those two, Moderna has an edge, for two reasons. First, Moderna's vaccine is easier to transport and store. It only requires storage in regular refrigerator temperatures, while Pfizer's needs ultra-low freezing temperatures. And second, Moderna is moving more aggressively to handle new strains. The company is testing two boosters; one is a third vaccine dose to increase neutralizing antibody levels, and the second is a strain-specific booster. The company is targeting the South African strain first. But if this booster works, Moderna may update its process to protect against new strains.
Prior to the announcement of Biden's order, Moderna was already looking at billions of dollars in revenue this year. That's significant for a company that just a year ago didn't have any product revenue on the horizon. Outside of the coronavirus vaccine program, all of Moderna's other candidates are in phase 2 or earlier studies.
Moderna said in a January business update that advance purchase agreements for its coronavirus vaccine this year represent $11.7 billion in revenue. Since that update, countries including Canada and Switzerland have increased their orders -- so we can expect Moderna's revenue to climb even higher. And earnings per share (EPS) estimates for Moderna's 2021 full year are more than $12.
MRNA EPS Estimates for Current Fiscal Year data by YCharts
We're looking at recurring billion-dollar revenue for Moderna. Last month, Moderna CEO Stephane Bancel said vaccine protection may last "a couple of years." And the company said at the J.P. Morgan Healthcare Conference, also last month, that protection likely will last at least a year. So we could imagine vaccinations once a year -- or possibly every two years. The company also is investigating a booster to use instead of a full vaccination each time it's administered.
The future of performance
Even though the stock has climbed quite a bit over the past year, I don't think the curtain has closed on Moderna's performance. That said, the pace of its gains may slow. Last year, investors piled into the shares amid excitement about the coronavirus vaccine in development. There was more uncertainty, but room for big gains with each bit of positive news. These days, Moderna -- with its product on the market -- represents a steadier investment.
And that brings us to the subject of an investment horizon. If you're looking for short-term gains, you will probably find more growth potential in an earlier-stage company working in the coronavirus space. Moderna might continue its winning streak this year, but I wouldn't expect its stock price's jump to be as steep as in 2020.
It's not too late
But, if all goes smoothly, it's likely Moderna's shares will continue to climb over time. And the "over time" part means this stock is a good bet for long-term investors.
This year, catalysts include first reports of revenue and outcomes of the booster shot clinical trials -- and Moderna has plenty of potential future growth drivers. The biotech company recently said it will begin clinical trials this year of vaccine candidates for HIV and seasonal flu. If data from those trials are positive, and Moderna maintains its leadership in the coronavirus vaccine market, you can expect Moderna's shares to reach even greater heights. It's not too late to buy into the next chapter of this growth story.
