You can usually instantly know how a company performed in its latest quarter without even looking at its numbers. All you have to do is take a glance at how its stock is performing in after-hours or pre-market trading following the release of the company's results.
Moderna (MRNA 0.51%) announced its first-quarter results before the market opened on Wednesday. And the company clearly performed well with its shares jumping both in pre-market trading and when the market opened.
Actually, saying that Moderna performed well is an understatement. The company blew Wall Street's estimates out of the water. Moderna reported Q1 revenue of $6.1 billion, more than tripling year over year. It posted earnings of $3.7 billion, or $8.58 per share. That's up from $1.2 billion, or $2.84 in the prior-year period.
Those numbers are indisputably impressive. But there's one number in Moderna's Q1 results that's a game-changer.
Image source: Getty Images.
Cash is king
$19.3 billion. That's the game-changing number in Moderna's Q1 update. It reflects how much cash, cash equivalents, and short-term investments the company had as of March 31, 2022.
Of course, this isn't the first time that Moderna reported a hefty cash position. The biotech's cash stockpile totaled $17.6 billion at the end of 2021.
Moderna has more cash than many drugmakers with market caps that are 2x, 3x, or even 4x larger than it is based on market cap. For example, AbbVie has a market cap of over $260 billion. However, its last reported cash stockpile of $9.8 billion is barely over half the size of Moderna's.
The old adage that "cash is king" is true. Moderna's massive cash stockpile enables the company to easily fund its pipeline programs. The company has ample flexibility to make strategic acquisitions.
And with the vaccine stock floundering in recent months, Moderna can afford to buy back shares -- lots of them. The company had never repurchased its shares prior to the fourth quarter of 2021.
NASDAQ: MRNA
Key Data Points
But by the end of January 2022, Moderna had spent $1 billion on stock buybacks. Look for even bigger repurchases in the future: In February, the company's board of directors authorized a $3 billion stock buyback program.
An expanding kingdom
Moderna's cash kingdom will almost certainly expand. The company is set to increase its cash stockpile even more in the coming quarters.
For full-year 2022, Moderna expects to generate revenue of $21 billion. It anticipates that sales will be a little higher in the second half of the year than in the first half.
However, that guidance could prove to be overly conservative. Moderna's revenue outlook is based on advance purchase agreements (APAs) that have already been signed. There's a possibility that the company will land additional supply deals that boost its total revenue this year.
More potential good news
Moderna has experienced its fair share of bad news in recent months. But its Q1 results brought much-needed good news. And there could be more good news on the way.
One potential catalyst especially stands out for Moderna's near-term prospects. The biotech expects to report initial data for its bivalent COVID-19 booster mRNA-1273.214 in June 2022. This vaccine candidate combines Moderna's original COVID-19 vaccine mRNA-1273 with an omicron-specific candidate.
Moderna is also evaluating two experimental vaccines in late-stage clinical studies. It plans to enroll around 34,000 participants in a phase 3 study of respiratory syncytial virus vaccine candidate mRNA-1345. The company expects to enroll up to 6,900 women of child-bearing age in a study of experimental cytomegalovirus vaccine mRNA-1647. In addition, Moderna is preparing to advance its flu vaccine candidate mRNA-1010 into late-stage testing.
CEO Stéphane Bancel thinks that Moderna's late-stage pipeline "could lead to three respiratory commercial launches over the next two to three years." This scenario won't be possible without plenty of cash. And that's why Moderna's $19.3 billion cash position truly could be a game-changer.
