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Is a Beat Likely for Moderna (MRNA) This Earnings Season?
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Moderna (MRNA - Free Report) , slated to report first-quarter 2022 results on May 5, before market open, is expected to beat expectations. In the last reported quarter, the company delivered an earnings surprise of 14.85%.
Moderna’s share price has declined 47.1% so far this year compared with the industry’s decrease of 22.4%.
Image Source: Zacks Investment Research
The company’s surprise history has been mixed so far, with earnings beating estimates in three of the trailing four quarters while missing the same once. The average surprise is 11.88%.
Let’s see how things have shaped up for this announcement.
Factors to Note
Moderna’s first-quarter sales are likely to have been driven by the continued demand for its COVID-19 vaccine, Spikevax, and booster doses across the globe. The Zacks Consensus Estimate for product sales stands at $4.02 billion for the first quarter.
During the first quarter, Moderna received FDA approval for its COVID-19 vaccine, Spikevax, for use in adults. This is the first approval for the vaccine anywhere in the world. The approval will allow the use of the vaccine even without significant infection cases, unlike in case of emergency use authorization (“EUA”).
During the fourth quarter, Moderna received authorization for its COVID-19 vaccine, Spikevax, for use in adolescents in several countries followed by the authorization for the younger population, aged 6 to 11 years, during the first quarter. This should have boosted demand for the vaccine during the first quarter. However, the vaccine is yet to gain EUA for adolescents and children in the United States.
Moreover, Moderna also gained EUA from the FDA for the second booster dose of its COVID-19 vaccine for use in adults in March. Authorizations in other countries for the second booster dose are likely to follow. Although the authorization for the second booster dose is unlikely to have impacted first-quarter revenues, it should result in additional revenues going forward if governments exercise their options for the supply of the second booster dose.
The company has several advance purchase agreements for its COVID-19 vaccine with multiple countries for 2022 worth $19 billion along with options for the delivery of potential updated COVID-19 vaccine booster candidates aggregating $3 billion.
We note that although there is a fear of another COVID wave in upcoming months across the globe, current infections cases are significantly lower than previous year. The absence of major COVID-19 cases may hurt demand for vaccines, which may lead to lower-than-guided product sales for Moderna in 2022. Investors will likely ask questions regarding product sales guidance in the absence of significant COVID-19 cases. They will also focus on rising competition from COVID-19 oral drugs and their impact on estimate vaccine revenues.
Moderna has been developing several variant-specific booster doses of its COVID-19 vaccine, some targeting a specific virus strain like Omicron while some are targeting a couple of strains. The company is also engaged in evaluating its COVID-19 vaccine in younger patient population. In March, it announced that a phase II/III study evaluating the vaccine in children aged six months to six years met its primary endpoint.
Investors are likely to focus on updates related to its variant-specific booster doses as well as on any regulatory update related to the authorization of Spikevax for emergency use in adolescents and younger population in the United States on the first-quarter earnings call
Moderna’s grant revenues in the first quarter are likely to have been driven by the award from the Biomedical Advanced Research and Development Authority (“BARDA”) under the agreement to develop its coronavirus vaccine programs. The Zacks Consensus Estimate for grant revenues is pegged at $68 million.
Moderna is focusing on expanding its presence in several countries to support the delivery of mRNA vaccines and therapeutics locally. It is also expanding its manufacturing capabilities to support the delivery of Spikevax doses. Apart from its COVID-19 vaccine candidates, Moderna is developing 24 candidates in different stages of clinical studies, majorly mRNA-based products targeting different indications, including cancer. The company initiated a phase III study on its respiratory syncytial vaccine candidate in February 2022. It also initiated several early-stage studies during the first quarter to evaluate its vaccine candidates, including the flu vaccine and HIV vaccine. These developments are likely to have increased its operating expenses during the first quarter.
The company is also developing a few pipeline candidates in collaboration with partners like AstraZeneca (AZN - Free Report) and Merck (MRK - Free Report) , which use its mRNA technology to develop therapies targeting different indications. The partners pay milestone payments to Moderna, which are reflected as collaboration revenues. These collaboration revenues vary every quarter. The Zacks Consensus Estimate for collaboration revenues for the first quarter is pegged at $14.4 million.
Moderna and AstraZeneca are evaluating different candidates in early- to mid-stage studies targeting oncology and cardiovascular indications. The leading candidate being developed in partnership with AstraZeneca is AZD8601 as a treatment for ischemic heart disease.
Moderna and Merck have been developing a personalized cancer vaccine for recurrence-free survival for a year. Merck has been conducting a phase II study evaluating the cancer vaccine in combination with Keytruda targeting various oncology indications.
Moderna may discuss its progress with the development of its RSV vaccine candidate and cytomegalovirus (CMV) vaccine candidate, which are in late-stage studies, as well as other key candidates on its earnings call. Investors may focus on the time period required to get approval for the RSV and CMV vaccine candidates.
Earnings Beat Likely
Our proven model predicts an earnings beat for Moderna this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate ($5.43 per share) and the Zacks Consensus Estimate ($5.18 per share), is +4.93%.
Here is another large biotech stock that you may want to consider, as our model shows that it has the right combination of elements to post an earnings beat this season.
Vertex Pharmaceuticals (VRTX - Free Report) has an Earnings ESP of +0.87% and a Zacks Rank #2.
Vertex’s stock has surged 23.8% so far this year. VRTX topped earnings estimates in the last four reported quarters. Vertex has a four-quarter earnings surprise of 10.01%, on average.
Image: Shutterstock
Is a Beat Likely for Moderna (MRNA) This Earnings Season?
Moderna (MRNA - Free Report) , slated to report first-quarter 2022 results on May 5, before market open, is expected to beat expectations. In the last reported quarter, the company delivered an earnings surprise of 14.85%.
Moderna’s share price has declined 47.1% so far this year compared with the industry’s decrease of 22.4%.
Image Source: Zacks Investment Research
The company’s surprise history has been mixed so far, with earnings beating estimates in three of the trailing four quarters while missing the same once. The average surprise is 11.88%.
Let’s see how things have shaped up for this announcement.
Factors to Note
Moderna’s first-quarter sales are likely to have been driven by the continued demand for its COVID-19 vaccine, Spikevax, and booster doses across the globe. The Zacks Consensus Estimate for product sales stands at $4.02 billion for the first quarter.
During the first quarter, Moderna received FDA approval for its COVID-19 vaccine, Spikevax, for use in adults. This is the first approval for the vaccine anywhere in the world. The approval will allow the use of the vaccine even without significant infection cases, unlike in case of emergency use authorization (“EUA”).
During the fourth quarter, Moderna received authorization for its COVID-19 vaccine, Spikevax, for use in adolescents in several countries followed by the authorization for the younger population, aged 6 to 11 years, during the first quarter. This should have boosted demand for the vaccine during the first quarter. However, the vaccine is yet to gain EUA for adolescents and children in the United States.
Moreover, Moderna also gained EUA from the FDA for the second booster dose of its COVID-19 vaccine for use in adults in March. Authorizations in other countries for the second booster dose are likely to follow. Although the authorization for the second booster dose is unlikely to have impacted first-quarter revenues, it should result in additional revenues going forward if governments exercise their options for the supply of the second booster dose.
The company has several advance purchase agreements for its COVID-19 vaccine with multiple countries for 2022 worth $19 billion along with options for the delivery of potential updated COVID-19 vaccine booster candidates aggregating $3 billion.
We note that although there is a fear of another COVID wave in upcoming months across the globe, current infections cases are significantly lower than previous year. The absence of major COVID-19 cases may hurt demand for vaccines, which may lead to lower-than-guided product sales for Moderna in 2022. Investors will likely ask questions regarding product sales guidance in the absence of significant COVID-19 cases. They will also focus on rising competition from COVID-19 oral drugs and their impact on estimate vaccine revenues.
Moderna has been developing several variant-specific booster doses of its COVID-19 vaccine, some targeting a specific virus strain like Omicron while some are targeting a couple of strains. The company is also engaged in evaluating its COVID-19 vaccine in younger patient population. In March, it announced that a phase II/III study evaluating the vaccine in children aged six months to six years met its primary endpoint.
Investors are likely to focus on updates related to its variant-specific booster doses as well as on any regulatory update related to the authorization of Spikevax for emergency use in adolescents and younger population in the United States on the first-quarter earnings call
Moderna’s grant revenues in the first quarter are likely to have been driven by the award from the Biomedical Advanced Research and Development Authority (“BARDA”) under the agreement to develop its coronavirus vaccine programs. The Zacks Consensus Estimate for grant revenues is pegged at $68 million.
Moderna is focusing on expanding its presence in several countries to support the delivery of mRNA vaccines and therapeutics locally. It is also expanding its manufacturing capabilities to support the delivery of Spikevax doses. Apart from its COVID-19 vaccine candidates, Moderna is developing 24 candidates in different stages of clinical studies, majorly mRNA-based products targeting different indications, including cancer. The company initiated a phase III study on its respiratory syncytial vaccine candidate in February 2022. It also initiated several early-stage studies during the first quarter to evaluate its vaccine candidates, including the flu vaccine and HIV vaccine. These developments are likely to have increased its operating expenses during the first quarter.
The company is also developing a few pipeline candidates in collaboration with partners like AstraZeneca (AZN - Free Report) and Merck (MRK - Free Report) , which use its mRNA technology to develop therapies targeting different indications. The partners pay milestone payments to Moderna, which are reflected as collaboration revenues. These collaboration revenues vary every quarter. The Zacks Consensus Estimate for collaboration revenues for the first quarter is pegged at $14.4 million.
Moderna and AstraZeneca are evaluating different candidates in early- to mid-stage studies targeting oncology and cardiovascular indications. The leading candidate being developed in partnership with AstraZeneca is AZD8601 as a treatment for ischemic heart disease.
Moderna and Merck have been developing a personalized cancer vaccine for recurrence-free survival for a year. Merck has been conducting a phase II study evaluating the cancer vaccine in combination with Keytruda targeting various oncology indications.
Moderna may discuss its progress with the development of its RSV vaccine candidate and cytomegalovirus (CMV) vaccine candidate, which are in late-stage studies, as well as other key candidates on its earnings call. Investors may focus on the time period required to get approval for the RSV and CMV vaccine candidates.
Earnings Beat Likely
Our proven model predicts an earnings beat for Moderna this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate ($5.43 per share) and the Zacks Consensus Estimate ($5.18 per share), is +4.93%.
Zacks Rank: Moderna carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Moderna, Inc. Price and EPS Surprise
Moderna, Inc. price-eps-surprise | Moderna, Inc. Quote
Another Stock to Consider
Here is another large biotech stock that you may want to consider, as our model shows that it has the right combination of elements to post an earnings beat this season.
Vertex Pharmaceuticals (VRTX - Free Report) has an Earnings ESP of +0.87% and a Zacks Rank #2.
Vertex’s stock has surged 23.8% so far this year. VRTX topped earnings estimates in the last four reported quarters. Vertex has a four-quarter earnings surprise of 10.01%, on average.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.