In the wake of Covid-19’s spread to the U.S. in 2020, Moderna (NASDAQ:MRNA) was suddenly thrust into the spotlight and given celebrity status. While many other assets faltered, MRNA stock literally rose to the occasion.
Yet, financial market traders often have short attention spans and sentiment can change quickly. Starting in the fall of 2021, Wall Street turned against Moderna and the company’s shares lost much of their value in the ensuing months.
Whether this is good or bad news, depends on one’s outlook for MRNA stock.
With the omicron variant of Covid-19 spreading in the U.S. and elsewhere, it only makes sense that Moderna’s shares should become more valuable in 2022.
If the market has mispriced the shares, this is really an opportunity, not a problem. Thus, folks who are willing to embrace the volatility may have a chance to own a stake in a world-famous pharmaceutical company at a very reasonable price point.
MRNA Stock at a Glance
It’s really mind-boggling to consider that MRNA stock was slightly below $30 during the onset of Covid-19 in the U.S. If you’re waiting for the stock to get back to that price, don’t count on it happening anytime soon.
At around $105, Moderna shares finished 2020 with an over 200% return, but that was just the beginning. As the rally continued into 2021, the stock touched an astounding high of $497.49 in August.
Yet, that run-up wasn’t destined to last forever. As MRNA stock declined in the back half of 2021 and early 2022, it crash-landed near $155 on Jan. 26.
Soon, we’ll discuss how this share-price collapse has made Moderna shares a potentially better value.
Looking at it from a technical perspective, there’s support from 2021 at the $120 level. If the stock gets down there, it should be hard for contrarian investors to resist taking a position in Moderna.
Still Combating Covid-19
Prior to the spread of the omicron variant strain, some people might have become complacent about Covid-19.
Hopefully by now, with omicron still spreading quickly, people should have snapped out of their complacency. Shockingly, a recent count has the U.S. averaging 618,231 Covid-19 cases per day.
Not only that, but Covid-19 related hospitalizations are averaging 153,306 per day, and tragically, the average daily deaths exceed 2,466.
In the U.S., Moderna and its pharmaceutical-market competitors are needed more than ever, it appears. Appallingly, as of Jan. 27, the U.S. led the world with a total Covid-19 case count of 72.9 million and a death toll of 876,066.
Thankfully, Moderna is responsive to the call for newer, better vaccines. Reportedly, the company has begun testing an omicron-specific Covid-19 booster shot in healthy adults.
Specifically, Moderna plans to test around 300 participants who only received two primary Covid-19 vaccine doses, as well as another roughly 300 participants who received two primary doses and a booster shot.
Making a Lot of Sense
Even while Moderna is working diligently to combat Covid-19, it seems that Wall Street’s sentiment surround the company remains largely negative.
However, there’s a silver lining to the steep decline in MRNA stock. As of Jan. 27, Moderna’s trailing 12-month price-to-earnings (P/E) ratio is ultra-low at 9.51.
Perhaps this is what has prompted analysts at Deutsche Bank (NYSE:DB) to declare that the stock’s current valuation “makes a lot more sense.”
This represents a shift in Deutsche Bank’s outlook for Moderna. The firm initiated coverage of Moderna with a “sell” rating in October 2021, but is now raising that rating to “hold.”
Thus, the share-price crash should make Moderna more attractive to value hunters. Noting that MRNA stock “has more than halved in value,” Deutsche Bank analyst Emmanuel Papadakis called Moderna’s $65 billion valuation “more reasonable.”
The Takeaway for MRNA Stock
When the share price of a solid company falls, that’s when value-focused investors should take notice.
Moderna’s P/E ratio shows that the company’s shares are trading at a very reasonable price point now. Plus, Moderna remains highly relevant in the ongoing battle against Covid-19.
I give MRNA stock a “B” in my Portfolio Grader.
Therefore, MRNA stock looks compelling at its current price point and may be poised for a well-deserved rebound soon.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.
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