Down Close to 40% Year-To-Date, Now is a Good Time to Scoop Up Moderna and BioNTech

The markets have been experiencing a selloff over the last few weeks because investors are worried about impending interest rate hikes, overvalued equities, and geopolitical tensions. Consequently, popular healthcare stocks Moderna, Inc. (MRNA) and BioNTech SE (BNTX), from companies that are known for their high efficacy COVID-19 vaccines, have plunged close to 40% in price year-to-date.

However, these companies are expected to maintain their growth pace in the coming quarters thanks to multiple vaccine jabs having been approved by regulatory bodies. Approximately 63.4% of the U.S. population is fully vaccinated, while 40.1% have taken their booster vaccine doses. BNTX is reportedly testing its omicron-specific vaccine in adults, while Moderna expects people to require a fourth vaccine shot soon.

Given this backdrop, we think it could be wise to add Moderna, Inc. (MRNA) and BioNTech SE (BNTX) to one’s portfolio. These companies are expected to report substantial profits over the next several quarters, so their shares could generate solid ROI for investors.

Moderna, Inc. (MRNA)

MRNA in Cambridge, Mass., is a biotechnology company that is focused on creating transformative medicines based on messenger ribonucleic acid (mRNA) to improve patients' lives. The company develops technologies that enable the development of mRNA medicines for diverse applications. It also develops vaccines and therapeutics for infectious diseases, immuno-oncology, rare diseases, autoimmune and cardiovascular diseases independently and with its strategic collaborators. According to a Centers for Disease Control and Prevention (CDC) study, mRNA booster shots from MRNA effectively prevent both moderately severe and severe COVID-19, especially regarding the omicron variant.

On January 10, 2022, MRNA announced that it had made a collaboration agreement with Carisma Therapeutics Inc., a pioneer in macrophage-based therapeutics, to discover, develop and commercialize in vivo engineered chimeric antigen receptor monocyte (CAR-M) therapeutics for the treatment of cancer.

MRNA’s revenue increased 3,065% year-over-year to $4.96 billion in the third quarter, ended Sept. 30, 2021. The company’s net income came in at $3.33 billion, versus a $233 million net loss in the year-ago period. Also, its EPS was $7.70, compared to a $0.59  loss per share.

Analysts expect MRNA’s EPS and revenue for its fiscal 2021 to increase 1,437.2% and 2,098%, respectively, year-over-year to $26.21 and $17.66 billion. The stock has declined  39.9% in price year-to-date.

MRNA’s strong fundamentals are reflected in its POWR Ratings. It has an overall B rating, which equates to Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree.

It has an A grade for Quality and a B grade for Growth and Value. It is ranked #24 of 453 stocks in the Biotech industry. Click here to see the other ratings of MRNA for Momentum, Stability, and Sentiment.

BioNTech SE (BNTX)

Headquartered in Mainz, Germany, BNTX is a clinical-stage biotechnology company that focuses on patient-specific immunotherapies to treat cancer and other serious diseases. The company develops a broad product pipeline using different scientific approaches and technology platforms, including individualized mRNA-based product candidates, targeted cancer antibodies, checkpoint immunomodulators, and small molecules. On Dec. 8, 2021, BNTX and Pfizer Inc. (PFE) announced that preliminary laboratory studies suggested that three doses of the Pfizer-BioNTech COVID-19 vaccine neutralize the omicron variant, while two doses significantly reduce neutralization titers.

On Jan. 11, 2022, BNTX announced that it had developed a new computational method in collaboration with InstaDeep Ltd., which analyzes worldwide available sequencing data and predicts high-risk variants of SARS-CoV-2. The early warning system combines spike protein structural modeling with artificial intelligence to detect and monitor high-risk variants by identifying more than 90% of WHO-designated variants  an average of two months before receiving the official designation.

For its fiscal third quarter, ended Sept. 30, 2021, BNTX’s total revenues increased 8,918.2% year-over-year to €6.08 billion ($6.88 billion). The company’s net profit came in at €3.21 billion ($3.63 billion), versus a €210 million ($237.73 million) net loss. Its EPS was  €12.35, compared to a €0.88 loss per share. For its fiscal 2021, BNTX’s EPS and revenue are expected to increase 59,542.9% and 3,249.2%, respectively, year-over-year to $41.75 and $19.76 billion. It surpassed the consensus EPS estimates in each of the trailing four quarters. The stock has declined 39.3% in price year-to-date.

BNTX’s POWR Ratings reflect this promising outlook. The stock has an overall B rating, which equates to Buy in our proprietary rating system.

It has an A grade for Value and a B grade for Growth and Quality. It is ranked #16 in the Biotech industry. To see the additional ratings of BNTX for Momentum, Stability, and Sentiment, click here.

MRNA shares were trading at $163.49 per share on Wednesday afternoon, up $10.95 (+7.18%). Year-to-date, MRNA has declined -35.63%, versus a -7.10% rise in the benchmark S&P 500 index during the same period.

Since he was in grade school, Dipanjan was interested in the stock market. This led to him obtaining a master’s degree in Finance and Accounting. Currently, as an investment analyst and financial journalist, Dipanjan has a strong interest in reading and analyzing emerging trends in financial markets.

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