Moderna has been on a magical run. The company went public in 2018 at $23 a share before anyone had even heard of a pandemic. At that point, pandemics were things that happened to other people in countries that didn’t have Instacart. But here’s the thing that kills me, I went to college! I read the digital newspaper. I don’t watch CNBC but I try to keep up with new companies that might have technology that will change the world. But for some reason, it never occurred to me to invest in Moderna, the company that makes one of the most effective vaccines of all time. So why is that? Why wasn’t Moderna on my radar? Off the top of my head, I can think of three reasons:
- THERANOS! Remember Theranos? For a few years it was the darling of Wall Street until everyone realized blood tests aren’t that easy and the company’s earnings were as phony as Elizabeth Holmes’ smile. For those of us whose last contact with the world of science was high school psychics sophomore year when memorizing the elemental table seemed like a total waste of time, Theranos was an example of how non-scientific people can get burned investing in science they really don’t understand.
- Free, Free, Free, Free. When the vaccines were being tested, I kept reading about how they would be free to the public and for some reason I internalized that message and came under the false impression that the amount of money the drug companies would charge governments around the world would be reduced lest they be accused of trying to profit off the pandemic. Turns out, it’s OK to profit off the pandemic as long as it’s not considered to be too much profit.
- General Laziness. I’m generally lazy so rather than check back and see what Moderna’s stock was up to in the latter half of 2020 when it was rumored their mRNA technology would revolutionize vaccines around the world, I somehow managed to forget all about it. To be fair, ESPN ran The Last Dance during this same period and I was transported back to the best years of my childhood.
So what did not buying shares of Moderna cost me? Well, this is the part of investing I enjoy almost as much as making actual money in the market. I know you’re not supposed to play the woulda, coulda, shoulda game but I love that game! So let’s take a moment and play.
If you had been smart enough to realize that Moderna was one of a handful of companies around the world that was on track to test it’s COVID vaccine – because, you know, every night on the news it was mentioning Moderna’s COVID vaccine – then you may have invested in Moderna on May 4, 2020 when the stock traded at $59.25. If you had taken $25,000 of your hard earned savings and bought shares of Moderna, those shares would be worth $177,637 today. Not bad for simply following the news and realizing that the company that’s coming out with a viable vaccine could see its share price appreciate in the near future.
The question is, is it it too late to join the party? Pfizer and Moderna both recently raised the price of the vaccine in their latest contract with the EU by 25%. And booster shots are all but a certainty with the rise of Delta variant. But Moderna has a long way to go to catch up to its valuation. The company just recorded its first quarter of profitability and while revenue is growing it now trades at a price earnings ratio of 278. After a run up of 434% in 2020, the stock is damn expensive. Can it really go any higher? Pfizer trades at a P/E of 19 and has a 3.45% yield. That seems like the smarter play. Moderna will simply add its name to a long list of companies I somehow managed to miss.
