Should Market Participants Take a Closer Look at Moderna Inc. (MRNA)?

Moderna Inc. (NASDAQ: MRNA) have jumped 1.68% since today opening bell. First, let’s talk about the stock movement. The company report on October 8, 2020 that DARPA Awards Moderna up to $56 Million to Enable Small-Scale, Rapid Mobile Manufacturing of Nucleic Acid Vaccines and Therapeutics. As its trading volume dropped significantly and passed its daily average at 3.99 million shares. Before peaking at $95.21 per share as its 52 week high, the Healthcare giant hit all-time low of $13.53 per share in 01/07/20. As of now, MRNA trading high at $73.67 per share and has seemingly settled at around $73.00 per share, still up from its level of $31.86 at which it had traded for months.

Moderna Inc. (MRNA) has been in rally mode, as indicated by the relationship between its 200-day and 20-day major moving averages. That said, over the past 30 days, MRNA shares have risen 28.76%. The stock has moved up 415.54 over the trailing 12 months, gaining behind the rest of the market by 2173.19%. It has also trailed competitors and similar names by 180.86%.

Looking at Key Indicators

Naturally, a cursory survey of superficial price points from the chart don’t say a whole lot about where MRNA shares could be headed. That’s why we need to dig a little deeper and check out what some of the most important momentum indicators seem to be saying.

The relationship between changes in price and the underlying strength or weakness over periods can point out deeper factors in the pattern that can often generate insights for technical analysts through momentum factors. Two of our favorite oscillating indicators are the Relative Strength Index (RSI) and the Stochastic %k Oscillator. In each case, the scoring is on a scale somewhere between 0 and 100, and in case, the levels to watch are “70” and “30”, with the former representing an “overbought” state and the latter presenting an “oversold” state.

With that in mind, here is a look at MRNA shares from this perspective. The 20-day RSI reading for MRNA is currently 58.57, which indicates that is not particularly expensive or cheap, and not predisposed to a reactive price movement based on this measure. If we look at the 20-day Stochastic %k measure, we find it at 86.76, which represents another indication of a overbought outlook.

Listening to the Analysts

Right now, MRNA shares appear to be trading -19.58% under the average price target for one year ahead from Wall Street analysts, which is at $92.29. On average, Street analysts put their recommendation at 2.10, which is scored on a scale from 1 to 5, with 1 representing a “Strong Buy” and 5 representing a “Strong Sell”.

That suggests analysts are neutral on MRNA looking ahead over the coming 12 months.

Assessing the Risk

We would also note that MRNA has posted average daily volatility over the past two weeks of 39.44%, or 31.28% less than it has scored on the same measure over the past hundred days.

The Fundamentals in Focus

As we now turn to the fundamental picture, we begin by analyzing it the way one might analyze a building: by starting with the foundation – the balance sheet. Without a strong foundation, the rest of the structure can’t stand.

For MRNA, cash levels are currently sitting at 1.76 billion. That figure is balanced by 161.65 million in current liabilities. To further round out the picture, total assets are at 3.49 billion and total liabilities sit at 539.12 million, granting a pretty thorough ground-up sense of the company and how it might withstand challenges ahead, should they appear.

In terms of recent free cash flow, MRNA, is currently reporting -154.92 million, which represents a quarterly net change of 1.53 billion in cash flowing in the door. In terms of operations, the company reported -130.07 million in net operating cash flow.

Looking at the revenue path, we saw last quarter’s top-line number come in at 66.35 million in total revenues, which represents a y/y quarterly change of -407.15, and a sequential quarterly sales grow of 406.90%.

That brings us to the real meat of the matter: the bottom line. Moderna Inc. (MRNA) yielded a gross basic income of 188.48 million, which comes on a Cost-of-Goods-Sold number registering at 66.35 million, seated in 380.53 billion total diluted outstanding shares, adding up to earnings per share of -1.40. Notably, the consensus view of analysts looking ahead to next quarter is currently at -0.27.

That allows us to round out this picture with a look at valuations. Based on this data, and the forecasts we have at hand, the coming fiscal year looks to be headed toward 2.68 in total earnings per share.

However, estimates are only guesses about the future. Both business and investment trends are more important to take into consideration.

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