As Promised, Here's Condor's Assessment -- Of A Fair Value, For Moderna's Common Stock -- As Of November 12, 2024...

To be fair, the Wall Street analysts are pretty deeply split, on their assessment of the company's future. Leerink recently became the ultra-bear, dropping its 12 month target from $46, to $38. But most others are significantly north of that dour figure.

For example, BofA Securities values it at $90 (but down from $110, a quarter ago). And Oppenheimer places it at $125 a share. Moderna's current market cap is just under $17 billion -- with about 385 million shares outstanding. For the full year 2024, it will likely record total revenue of about $2.895 billion -- so the shares are trading on the NASDAQ at just about six times sales. To put it another way, the price today only assumes it can sell the mRNA vaccines -- of all stripes for six more years, at this pace. That is far too pessimistic, even with Pfizer and Merck offerings coming to market, to compete. You see, vaccines tend to sell at steady levels. . . for decades, not just six years (or so). So, this puts Moderna in the category of a much-undervalued stock, at today's trading prices. I'd conjecture that a fairly conservative value. . . would be about 14 years of sales, or roughly a little more than double the trading price tonight.

All of that said, while Moderna won't likely reach its COVID pandemic high water vaccine sales levels again in the near term (back when the shares were trading at almost $450, for a while). . . the fundamental business remains very strong -- and any material good news (like uptake on its RSV vaccine) at the bottom line, will cause a more pronounced spike in its NASDAQ stock price (since it is so much smaller than say Pfizer, GSK, Merck or Novo, comparatively speaking, on market caps). Sure, there are competitors -- but this is a very steady state vertical.

Now, the specific question I was asked was whether any of these "majors" might buy up Moderna outright. I think that unlikely, since most of them already have collaboration agreements to share expenses and profits on various already on market mRNA vaccines. The most likely "majors" level acquirer would be Merck (strong balance sheet -- and a cash flow juggernaut, in pembrolizumab). . . but even with Moderna trading around $43.50 tonight, I'd be more inclined to bet on its organic earnings, now that its expense control has kicked in. [OTOH, my guess is that a buyer like Merck, should it emerge, would need to pay around $34 billion to get control of Moderna.]

Vaccines are a great business -- just not the astronomical margins that pure pharma can command, since much of the bulk must be priced in a way that the developing world can afford. So, yes -- Anon. I'd buy in at these levels, and trust that the market will fairly value Moderna at at least $85, in a year or so. We will update, a year from now.

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