Most retail traders were focused on macro-news, such as the Fed tapering bond purchases. However, a few specific sectors saw massive losses on Thursday. The worst-performing of which were vaccine manufacturers, most of whom reported single to double-digit percentage losses. The main catalyst came from Moderna (NASDAQ: MRNA), which ended up disappointing Wall Street despite reporting an already impressive growth rate.
Moderna’s Q3 results were still positive, although not as high as originally anticipated. Revenues for the quarter were around $4.9 billion, around 14% higher than Q2, and a staggering 3047.4% higher than last year. However, that figure is still $1.3 billion lower than what most analysts were predicting.
Additionally, Moderna’s Q3 earnings-per-share also disappointed analysts. The GAAP EPS of $7.70 that Moderna reported also missed Wall Street’s targets by $1.41. It goes to show that even if a company is growing fast, what’s most important is whether it lives up to its expected growth, whether that be a justified figure or not.
Following the news, Moderna’s management also decided to lower its guidance for 2021. The company now predicts full-year revenues of around $15 billion to $18 billion, less than the $22 billion previously expected back in last quarter’s earnings call. That’s still an impressive figure for the company, but the revised expectations were enough to send share prices cratering.
“We added additional resources, skilled personnel to the release and of the manufacturing line, and we expect to increase the weekly number of doses released. We believe resolution of these factors put us in a good position heading into Q4 and 2022,” said Moderna CEO Stephane Bancel in her earnings call.
Bank of America analysts ended up downgrading the stock to an underperform rating, with a target price of just $135. That would suggest a 60% loss compared to where prices are at right now. Prices have already fallen by almost half since hitting a peak earlier this summer. Supply chain issues are one of the main reasons why Moderna has tumbled so much.
Shares of Moderna ended up falling around 17.9% in response to the news. It was the single-worst intraday loss for the company in recent history while also reaching a three-month low. Despite earlier optimism, most analysts now covering the stock are either neutral or bearish. Six Wall Street analysts are bullish, while five are neutral, and another five are pessimistic about Moderna’s prospects.
Other vaccine stocks that moved on the news include Pfizer (NYSE: PFE), BioNTech (NASDAQ: BNTX), and Novavax (NASDAQ: NVAX), all of which were down between 5-9% over the course of Thursday. In contrast, AstraZeneca (NASDAQ: AZN) and Johnson & Johnson (NYYSE: JNJ) weren’t moving that move on the news.
Moderna Company Profile
Moderna is a commercial-stage biotech that was founded in 2010 and had its initial public offering in December 2018. The firm’s mRNA technology was rapidly validated with its COVID-19 vaccine, which was authorized in the United States in December 2020. Moderna had 24 mRNA development programs as of early 2021, with 13 of these in clinical trials. Programs span a wide range of therapeutic areas, including infectious disease, oncology, cardiovascular disease, and rare genetic diseases. – Warrior Trading News
