Why Moderna Stock Is Up By 18% Today

Key Insights

• Vaccine stocks rally amid a major coronavirus outbreak in China.
• Moderna starts a clinical trial of an experimental HIV trimer mRNA vaccine.
• Earnings visibility remains the key problem for Moderna.

Moderna Stock Rallies As China Faces A New Wave Of Coronavirus

Shares of Moderna gained strong upside momentum after the company announced  that “the first participant has been dosed in a clinical trial of an experimental human immunodeficiency virus (HIV) trimer mRNA vaccine (mRNA-1574)”.

The company noted that while developing a vaccine against HIV has been difficult to achieve, it believed that mRNA technology offered a new opportunity.

The market has been worried that Moderna’s revenues will drop when the coronavirus pandemic comes to an end. The development of the HIV vaccine boosts hopes that Moderna will not be a “one-trick pony”, and the company will ultimately find other sources of revenue.

It should be noted that other vaccine-related stocks like BioNTech and Novavax have also been moving higher today as China was forced to impose new curbs amid the rapid spread of coronavirus in Shenzhen.

What’s Next For Moderna Stock?

Earnings estimates for Moderna have been moving lower in recent weeks. Currently, analysts expect that the company will report earnings of $27.15 per share in 2022. The company’s profits are projected to decline to $10.13 per share in 2023, so the stock is trading at roughly 16 forward P/E for the next year.

It should be noted that earnings visibility remains the key problem for Moderna as it is not clear whether the company will be able to find additional sources of revenue when the revenue from its coronavirus vaccine declines.

While the recent news on the HIV vaccine make a good headline, it should not help Moderna financially in the near future. However, Moderna stock will remain a decent choice for those traders who are willing to bet on the long-term success of the mRNA technology.

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