What happened

Shares of Moderna (MRNA 1.69%) rose 27% in June, according to data from S&P Global Market Intelligence. Known for its highly effective COVID-19 mRNA vaccine, Moderna rose in tandem with the spread of the concerning delta variant across the world in June. The company also announced studies showing its vaccine was highly effective against that variant and others, and it locked up more supply agreements with the U.S. and other countries.

A nurse holds a hypodermic needle as a patient waits in the background.

Image source: Getty Images.

So what

Early in the month, Moderna secured a long-term supply agreement with UNICEF to sell the organization 34 million doses in the fourth quarter of 2021, along with up to 466 million doses in 2022. That was followed up by a purchase of 200 million doses, securing supply into the first quarter 2022, and then another 150 million doses purchased by the European Union, bringing its order commitment total to 460 million, including boosters for new variants in 2022.

The new purchase orders by major countries coincided with Moderna's release of clinical data showing its COVID vaccine as protective against six of the newer variants, including the delta variant causing so much concern. Rival Johnson & Johnson's (JNJ -0.46%) vaccine has only shown to be about 60% effective against the delta variant, a lower rate than two-dose vaccines like Moderna's.

Now what

Even after its June run, Moderna's stock trades at a bargain valuation of less than 10 times next year's earnings estimates. That's because investors see the company's huge COVID windfall as a one-time occurrence, and that those earnings will decline in 2023 and beyond. But with the delta variant causing worries -- and with Moderna's vaccine perhaps providing superior protection versus the one-dose Johnson & Johnson -- investors now might be forecasting a longer life for Moderna's COVID franchise than it had previously.

Moderna also still isn't given much credit for its fairly large pipeline of other mRNA indications, since mRNA is only a newly commercialized technology. So despite the stock's monster run over the past year, any new COVID variants or new mRNA indications from its pipeline could extend the rally even further.