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MRNA Stock: Moderna Stock Is Worth Much More Based on Earnings


#Modern (NASDAQ:MRNA) is reaping the rewards of its successful #Covid-19 vaccine, pushing MRNA stock higher and higher. #It is now winning more contracts to deliver its vaccine and analysts are taking note.

#Source: #Ascannio / #Shutterstock.com

#And the stock has been climbing. #Especially since the FDA approved its #Covid-19 vaccine on #Dec. 18 for emergency use. #For example, MRNA stock is up over 82% in the last six months. #And in the last two months, the stock has climbed over 60% to around $111.

#Earnings #Forecasts and #Valuation

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#Moreover, earnings forecasts for 2021 and 2022 put MRNA stock on a reasonable valuation despite its recent rise. #Analysts surveyed by #Seeking #Alpha now show that its earnings per share (EPS) will hit $9.46 in 2021. #This is up from a loss of $1.69 in 2020.

#In addition, for 2022 I estimate an EPS of $9.92, or almost $10 per share. #That means MRNA stock is trading for 11.4 times EPS in 2022. #This is seen by dividing $114.39 by $10 EPS. #That is a very reasonable valuation.

#However, I believe this could be low-balling its potential earnings power. #Each day it seems the company is picking up new contracts for its #Covid-19 vaccine and related products.

#For example, the company just signed up the U.S. #Army to an additional $1.97 billion contract for 100 million doses. #That works out to about $20 per dose. #This is in addition to up to 770 million doses that #Moderna said it had confirmed as of #Dec. 18.

I think it is possible its earnings power will be at least $12 per share over the next several years. #This is 20% higher than analysts conservatively estimate right now.

#Moreover, at 15 times earnings, a more appropriate valuation for a company with such earnings power, MRNA stock will be worth much more.

#For example, 15 times $12 EPS yields a price target of $180 per share. #This is a potential gain of over 57% from today’s price of $114.39 on #Dec. 29.

#Moderna’s #Long #Term #Value

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#Moreover, over the long term, it is not out of the question that #Moderna could sell 1 billion doses annually. #At $20 per dose, that implies its revenue would be $20 billion annually.

#This price is substantially lower than a rumored $50 to $60 per dose price level. #That is what The #Financial #Times and #Reuters reported in #July that #Moderna was going to price its vaccine. #In other words, my revenue estimate is very conservative.

#Now at the present, the stock trades for 6 times 2021’s revenue, based on its #Seeking #Alpha revenue forecasts. Therefore, at 6 times $20 billion in revenue MRNA should have a market cap of $120 billion.

#This represents a gain of 172% above its present $44.08 billion market cap, i.e., 2.72 times its price today.

#In other words, MRNA stock could be worth $311.14 over the long term based on 1 billion doses a year at $20 per dose. #This is found by multiplying 2.72 times its present price of $114.39.

#And don’t forget we are being conservative in our revenue estimate.

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Therefore, we can say based on its near-term earnings power, MRNA stock is worth 57% more at $180. #And based on its long-term earnings power, the stock is worth 172% more at $311.14.

#What #To #Do #With MRNA #Stock

#Don’t just take my word that MRNA stock is undervalued. #For example, #Tipranks reports that 16 analysts believe that the average price target for the stock should be $148.31.

#This represents a potential gain of over 30% above its present price.

#Moreover, #Yahoo! #Finance reports that 15 analysts have an average price target of $140.80 for MRNA stock. #That represents a potential gain of 23% over today’s price.

#So, whether you look at MRNA from a near-term, long-term, or analyst consensus view, the target price is still substantially higher than today. #It this comes to pass, investors in MRNA stock have a good chance of making money.

#On the date of publication, #Mark R. #Hake did not have (either directly or indirectly) any positions in any of the securities mentioned in this article.

#Mark #Hake runs the #Total #Yield #Value #Guide which you can review here.



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https://investorplace.com/2020/12/mrna-stock-is-worth-more-based-on-earnings-power/

#MRNA ##Stock ##Moderna ##Stock ##Worth ##Based ##Earnings

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