Moderna (MRNA -1.44%) ranks as one of the biggest winners of the coronavirus vaccine race. The stock has skyrocketed, but has it gone up too much? In this Motley Fool Live video recorded on Jan. 6, 2021, Healthcare and Cannabis Bureau Chief Corinne Cardina and Fool.com writer Keith Speights discuss whether or not Moderna is overvalued after its impressive run.
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Corinne Cardina: Let's talk about Moderna. In 2020, Moderna stock went up 434 percent. Is Moderna overvalued at this point? I think it ended the year at 104, at one point it hit 178. Or could there be more room for growth in 2021 for Moderna?
Keith Speights: Absolutely there could be more room for growth for Moderna this year. I think the thing for investors to remember is that you always look to the future with stocks.
Even though Moderna doesn't have any significant revenue coming in right now except from collaborations and partnerships, that type of thing, they have a vaccine that could easily make, I think one estimate I saw was $11 billion this year. It could be more than that. I think it will be more than that.
But even if you just said it's $11 billion this year, with a market cap of a little over 40 billion, that's only around four times sales. That's not an extreme valuation for biotech stocks by any means.
But Moderna also has other pipeline candidates. They've already said they plan to use the money they are going to make this year to really beef up their pipeline. They're looking at potentially getting up to 50 clinical programs. There are a lot of opportunities for Moderna to grow in the future. Even if it might take a few years for some of those vaccines to potentially hit the market, again, we're always forward-looking as investors.
If we think that the opportunities for Moderna's pipeline candidates are good, then I don't think the company's valuation right now is too high by any means.
