What is the Moderna share price really worth?

Over the past year, the Moderna (NASDAQ: MRNA) share price has jumped 180%. Investors have clamoured to buy shares in the Covid-19 vaccine maker, as countries worldwide have rushed to buy its primary product. 

Unfortunately, it now looks as if the market is cooling on the business. Over the past three months, the stock has dipped by around 40%. Part of these declines can be traced back to the company’s poor third-quarter results. 

Third-quarter results

For the period ending 30 September, the group reported earnings per share of $7.70. Revenues amounted to $5bn for the period. But the company now expects to sell fewer vaccines throughout the rest of 2021. It was initially projecting total vaccine sales for the year of $20bn. Now the target is just $18bn. 

The good news is, the organisation already has $17bn in signed advanced purchase agreements in place for 2022. This suggests sales will only drop modestly in 2022.

However, this is not guaranteed. Just because these agreements have already been signed, it does not necessarily mean customers will cough up.

Compared to a year ago, when Moderna’s vaccine was just one of three, there is now a broader range of treatments for coronavirus on the market. More potential vaccine makers are also in the process of developing and seeking regulatory approval for their treatments. 

While these challenges could impact the company’s Covid vaccine sales, I think it is important to point out that this is not a one-trick pony. 

Moderna share price potential 

In October, Moderna started recruiting patients for a Phase 3 trial of its mRNA Cytomegalovirus (CMV) Vaccine. This virus infects the majority of people at some point during their lifetime. Infections are often benign, but it poses a significant risk to pregnant mothers and recipients of donated organs.

Researchers have been trying to develop a vaccine for this virus for more than five decades. It looks as if Moderna stands a chance at being able to crack the code with its mRNA technology. Analysts estimate the potential market for such a treatment could be worth as much as $5bn a year for the company. 

The group also has a range of other treatments in its development pipeline, although it could be some time before these reach the market. 

Considering these potential treatments and sales from the Covid vaccine, Wall Street analysts believe Moderna share price is worth $300 a share. 

It looks to me as if the market is concentrating too much on Moderna’s slowing growth and is not giving any account to its growth potential.

As such, I would buy the stock for my portfolio today as a growth investment. As the rest of the market is selling, I think now could be an attractive time to snap up the shares as a long-term investment at a discounted valuation.