KEY POINTS

  • This summer, the firm’s new booster shot may become available.
  • Recent studies suggest it helps deal with subvariants.
  • However, this may not be enough to persuade investors to buy a stock.

Shares of Moderna stock could soar again after a tumble in recent months. Even though the market hasn’t done well, the firm’s stock losing 43% this year is far more severe than the 19% decline suffered by the S&P 500 (^GSPC). Moreover, investors’ optimism toward Moderna‘s (NASDAQ:MRNA) shares has waned as their focus shifted from COVID-19 to inflation. It also doesn’t help that Novavax’s (NASDAQ:NVAX) vaccine may receive Emergency Use Authorization soon.

Moderna has a chance to make more COVID-19 money in the future, thanks to a catalyst that could alter the stock’s prospects.

Effective treatment of subvariants

One of COVID-19’s most aggravating features is that there are so many variations to keep track of. And it’s tough, if not impossible, to tell which ones are dangerous and which aren’t. For example, omicron’s discovery in November was a significant variant, prompting Moderna to develop a booster shot that targeted it.

In March, the firm began giving participants a new shot that combined its prior mRNA vaccination with an omicron-specific booster. On June 22, Moderna published findings from its bivalent booster candidate, mRNA-1273.214. The vaccine proved successful against subvariants of omicron – BA.4 and BA.5. CEO Stéphane Bancel describes these variants as “represent an emergent threat to global public health.” Moderna is currently working on submitting the data to regulatory authorities in the hopes of gaining approval for its new booster before August.

Could this spark Moderna stock to soar again?

Moderna’s stock has been on a tear since the results were published. The healthcare firm’s price rose from just under $130 on June 21 to nearly $150 last week. If the FDA approves the vaccine, it could send shares higher still. The vaccine may be critical in preventing infection resurgence before autumn.

The question is, how high will the stock rise? Various factors will determine how high, including whether COVID-19 case numbers surge and if this generates significant demand for the new booster. If that occurs, considering how unpredictable the stock market has been, it’s not out of the question to imagine a scenario where the stock rises back up to $400. In addition, any extra income for Moderna may set shares up for future gains.

Moderna’s COVID-19 vaccine has resulted in a slew of remarkable earnings for the firm (and gains for investors), with its trailing 12-month net income totalling $14.6 billion on revenue of $22.6 billion. Moderna’s free cash flow has also been strong, at more than $13 billion. Anything that can assist Moderna in achieving these figures will put it in a better position to continue growing and possibly pursue acquisitions.

Is Moderna’s stock a buy?

Moderna has a lot of promise, but there are also several questions. This makes valuing the stock difficult for investors. Even analysts have varying viewpoints; some predict the company’s share price to rise to more than $200, while SVB Leerink predicts it could fall to $70. Most are not overly optimistic, however, and don’t set price targets of even $300, much less $400. A lot would need to go right for Moderna’s stock to reach those heights again.

Although there is some potential in this new booster alone, it will probably not be enough to determine if Moderna stock could soar again. As a result, we advise investors to sit on the sidelines for now while this remains a highly volatile stock that may be too hazardous to hold.

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