Moderna Inc (MRNA, Financial) has experienced a minor daily gain of 0.23%, yet it's important to note a significant 3-month loss of -30.82%. With a Loss Per Share of $9.35, investors are faced with the question: Is Moderna modestly undervalued? This article delves into a valuation analysis to determine the true worth of Moderna (MRNA) and whether it presents a compelling investment opportunity. Keep reading for an in-depth analysis.
Company Introduction
Moderna Inc (MRNA, Financial) is a commercial-stage biotech pioneer, founded in 2010 with a public offering in December 2018. The company rapidly validated its mRNA technology with its COVID-19 vaccine, authorized in the United States in December 2020. With a diverse clinical trial portfolio, Moderna is at the forefront of therapeutic innovation. The contrast between Moderna's current stock price of $70.21 and the GF Value of $78.64 suggests that the stock may be trading below its fair value, indicating a potential undervalued status.
Summarize GF Value
The GF Value is a unique measure that reflects the intrinsic value of a stock, considering historical trading multiples, an adjustment factor based on past performance, and future business performance estimates. According to this metric, Moderna (MRNA, Financial) appears to be modestly undervalued. Moderna's market cap is currently $26.80 billion, and if the stock's price aligns closer to the GF Value Line, investors could anticipate a more favorable long-term return compared to the company's growth.
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Financial Strength
Assessing a company's financial strength is crucial to avoid the high risk of permanent capital loss. Moderna's cash-to-debt ratio of 5.21 places it in a less favorable position than 55.87% of its peers in the Biotechnology industry. However, with an overall financial strength rating of 8 out of 10, Moderna's financials are strong. Below is a visual representation of Moderna's debt and cash over the past years:
Profitability and Growth
Investing in profitable companies, particularly those with consistent profitability, is generally less risky. Moderna has been profitable for 2 out of the past 10 years. With a 12-month revenue of $9.10 billion and a Loss Per Share of $9.35, its operating margin stands at -29.32%, which is better than 66.25% of its industry counterparts. Despite these figures, the profitability rank of Moderna is 3 out of 10, which indicates poor profitability.
When it comes to growth, Moderna's 3-year average annual revenue growth of 578.9% outperforms 98.69% of its industry peers. However, its 3-year average EBITDA growth rate is 0%, ranking lower than its competitors in the Biotechnology industry.
ROIC vs WACC
Comparing a company's Return on Invested Capital (ROIC) to its Weighted Average Cost of Capital (WACC) provides insight into its profitability relative to the capital invested. Ideally, the ROIC should be higher than the WACC. For Moderna, the past 12 months have seen a ROIC of -28.71 and a WACC of 19.16. The historical comparison between ROIC and WACC for Moderna is depicted below:
Conclusion
In conclusion, Moderna (MRNA, Financial) appears to be modestly undervalued based on our valuation analysis. The company's financial condition is robust, yet its profitability is currently weak. Its growth ranks lower than many of its peers in the Biotechnology industry. For a more detailed understanding of Moderna's financial health, interested parties can explore its 30-Year Financials here.
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This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
