Moderna (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.
Undoubtedly, mRNA technology holds tremendous promise beyond COVID-19. Despite this, the hefty valuation is questionable.
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.
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.
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. (See MRNA stock analysis)
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Disclaimer: The article was written by Joey Frenette. At the time of publication, Frenette did not have a position in any of the securities mentioned in this article. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.