Moderna (NASDAQ:MRNA) makes a strong case to be known as one of the top innovators on the planet. The company's breakthrough vaccine, now referred to as Spikevax, is helping the world curb the spread of COVID-19.
While the pandemic is far from over, Moderna's shot is likely to keep cash flows coming in steadily over the next 18 months.
It's not just COVID-19 vaccines that have investors driving the top into the stratosphere, though. The company's incredible mRNA technology could pave the way for further breakthrough treatments for diseases beyond COVID-19.
Most notably, the company's cancer vaccines, which are moving through clinical trials, could be a significant needle-mover for MRNA stock for many years to come. The immunotherapy field could hold unfathomably large rewards for a safe and effective oncology treatment.
Still, many such mRNA cancer vaccines are in Phase 1 of clinical trials. So, investors shouldn't expect anything big out of the company anytime soon. (See Moderna stock charts on TipRanks)
For those willing to hold the stock for the long haul, though, MRNA stock could continue supporting its profound momentum with innovation.
Undoubtedly, mRNA technology holds tremendous promise beyond COVID-19. Despite this, the hefty valuation is questionable, and for that reason, I am bearish on the name.
mRNA Trials
Even if the current slate of cancer vaccines experiences setbacks, the company has numerous other clinical trials, including vaccines for the seasonal flu and Zika virus.
Could one such trial yield the next blockbuster treatment? It's hard to tell. Biotechnology stocks remain speculative in nature, given the hit-or-miss environment of treatments moving through the hurdles of clinical trials.
Valuation
As exciting as Moderna's pipeline of trails are, its valuation is a whole different story.
The stock looks beyond overvalued at around 18.6 times sales, after soaring around 189% year-to-date. That kind of rally is nothing short of unprecedented, with much euphoria likely baked in.
It'd take more than one big hit to come out of Moderna's vaccine pipeline to move the needle much higher.
Wall Street's Take
According to TipRanks' analyst rating consensus, MRNA stock comes in as a Hold. Out of 12 analyst ratings, there are three Buy recommendations, seven Hold recommendations, and two Sell recommendations.
The average Moderna price target is $363.13. Analyst price targets range from a low of $115 per share, to a high of $485 per share.
Bottom Line
While Moderna is one of the most exciting companies out there, the stock could easily get cut in half and still be considered richly valued.
In short, Moderna is a great company with a questionable valuation.
Disclosure: At the time of publication, Joey Frenette did not have a position in any of the securities mentioned in this article
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