Moderna, Inc.

Moderna, Inc. (NASDAQ: MRNA) is a biotechnology company that specializes in research and development of therapeutics and vaccines for infectious, cardiovascular, immuno-oncology, and auto immune diseases based on messenger RNA (mRNA). Currently, MRNA has 15 programs in clinical trials and a total of 24 development programs in six modalities comprising prophylactic and cancer vaccines, intratumoral immuno-oncology, and various therapeutics. It has also collaborated with various companies for the manufacturing of COVID-19 vaccines.

Why Should Investors Book Profit?

• Weak Liquidity Profile: The company's current ratio at the end of FY21 is 1.76x, compared to the industry median of 5.98x. This implies relatively lackluster liquidity profile against the industry median.
• Relatively Low Gross Margins: The company is operating at a gross margin of 85.8% in FY21 compared to the industry median of 87.1%.
• Strict Regulatory Risk: MRNA must conduct its business in the ambit of a strict regulatory environment, non-observance of norms could lead to recall or suspension of prior approvals.
• Leveraged Balance Sheet: The company is more exposed to balance sheet risk than its peers, with a Debt/Equity ratio of 0.05x as of December 31, 2021, compared to the industry norm of 0.0x.
• High Cash Conversion Days: Compared to the industry, the company has a long Cash Conversion Cycle (Days), meaning that it takes more days to convert its inventory to cash. In FY21, its Cash Cycle was 128 days, compared to an industry median of 63 days.

Valuation Methodology: EV/Sales Multiple Based Relative Valuation

(Analysis by Kalkine Group)

* % Premium/(Discount) is based on our assessment of the company's FY1 trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.

Stock Recommendation:

MRNA's share price has inclined 54.14% in the past six months and is currently leaning towards the lower band of the 52-week range of USD 119.33 to USD 497.49. We have valued the stock using the EV/Sales-based relative valuation methodology and arrived at a target price of USD 157.60.

Considering the company's industry above leverage, weak liquidity profile, current valuation and associated risks. we recommend a "Sell" rating on the stock at the closing price of USD 172.54, up 2.29% as of April 04, 2022.

1 -Year Technical Price Chart (as of April 04, 2022). Source: REFINITIV, Analysis by Kalkine Group

* The reference data in this report has been partly sourced from REFINITIV.

* All forecasted figures and industry information have been taken from REFINITIV. 

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