Given the recent news that AstraZeneca sold its Moderna stock, investors may wonder which stock, now, is the better buy.
From all indications, it looks like Moderna is the better stock to consider, as its sales projections for the COVID vaccine look more promising but is there a fly in the ointment that should deter investors?
Moderna vs. AstraZeneca: COVID-19 Vaccines
AstraZeneca’s COVID-19 Vaccine Raises Some Health Concerns
A cursory glance at Moderna’s past performance gives it higher marks as an investment choice.
AstraZeneca, by comparison lags behind Moderna, as its COVID-19 vaccine has been linked to problems with blood clots.
While the vaccine is shown to be effective against COVID-19, its side effects have caused more worry about prospective vaccine-takers. Even if the reported clotting is said to be rare, it still raises concerns for the public’s overall health.
Moderna’s mRNA Vaccine
Moderna’s COVID-19 vaccine is an mRNA vaccine – a new vaccine designed to fight infectious diseases.
This formulation directs the body’s cells to create a protein that promotes an immune response. The mRNA-1273 vaccine made by Moderna requires recipients receive 2 shots, 28 days apart.
Side Effects of the Moderna Vaccine
According to the CDC, the vaccine produced by Moderna may cause pain, redness, and swelling at the inoculation site and may trigger side effects, such as fatigue, headache, muscle pain, chills, nausea, and fever.
The symptoms, which are usually more predominant during the second shot, usually go away after several days.
The Efficacy of Moderna’s COVID-19 Vaccine
During clinical trials conducted by the CDC, the Moderna vaccine was 94.1% effective in preventing COVID-19 in individuals who receive 2 doses of the vaccine.
The vaccine was shown to be highly effective among people of diverse ages, including people with underlying health conditions.
Moderna Vs AstraZeneca Quick Overviews
According to Nasdaq, Moderna has become a strong player in the market, not only for its COVID vaccine but for its other innovative offerings in the fields of biotech and medicine.
Moderna (NASDAQ: MRNA) has a pipeline of products that it can roll out when efficacy of its first flagship vaccine is proven at scale.
A quick summation of AstraZeneca sends some troublesome thoughts to the minds of some investors. For example, a BBC report on April 30, 2021 said that the European Union (EU) was taking legal action against AstraZeneca, saying the company, during its vaccine rollout, did not supply the bloc with 90 million “jabs” or needles of the 90 million promised.
During the second part of the year, AstraZeneca also told the EU it could only deliver 70 million of the guaranteed 180 million doses.
The European Commission says its lawsuit disputes the company’s disregard for fulfilling its contractual obligations for supplying the vaccine and providing timely delivery. The BBC adds that all 27 member states in the EU support the lawsuit.
Moderna vs. AstraZeneca: Reviewing the Valuation, Financials, and Risks
According to a discounted cash flow analysis forecast, Moderna share price is overvalued at any price level above $168.
AstraZeneca meanwhile has upside potential according to consensus forecast of Wall Street analysts, with 5 of the 6 rating AZN shares a Buy and a single Hold recommendation.
Moderna is debt-free and has had no debt for the previous 5 years. Therefore, coverage of interest payments is not a concern either.
Moderna financials display a strong balance sheet. Short-term results show $11.70 billion in assets and over $8.44 billion in liabilities.
By comparison, AstraZeneca has a high level of debt. However, it also has a dividend north of 3%.
AstraZenecas’s large one-off items are affecting its financial results. However, on the positive side, AstraZeneca is trading below the estimate of its fair market value.
Earnings are forecast to grow 21.3% per year and have grown by 161.3% over the past year.
AstraZeneca’s (AZN) short-term assets of $18.7 billion do not adequately cover the firm’s short-term liabilities of $21.5 billion. However, its long-term liabilities of $461.9 billion do cover long-term liabilities of $28.97 billion.
Threat To Moderna Share Price
At this point, Moderna is looking forward to 2021, as it integrates its mRNA-1273 vaccine into the market.
The biggest risk for Moderna, is the valuation risk – the fact that Moderna’s stock has increased at too fast of pace.
Plus, it is important to remember that Moderna is not the only titan in the COVID-19 marketplace. Pfizer is also a viable competitor. And, BioNTech is an mRNA pioneer.
Still, Moderna has a promising pipeline. And the future is likely bright for all these players given the likelihood that vaccines will be issued regularly.
Currently, Moderna is using the company Catalent (NYSE: CTLT) to produce its vaccine. So, you may want to research that stock as well before making a commitment to Moderna. Catalent is a multinational business headquartered in Somerset, New Jersey.
Is AstraZeneca Stock a Buy?
The consensus among Wall Street analysts is that AZN is rated as a Buy. However, that does not mean it is the best stock to buy when compared to Moderna.
Investors Business Daily offers some insights you cannot ignore when it comes to investing in MRNA. For example, Moderna stock has a composite score of 75 out of a composite measure of 1 through 99. Therefore, the stock outranks 75% of other stocks based on that metric.
IBD also adds that analysts predict Moderna will be highly profitable during 2021, with an accelerating revenue.
While IBD suggests a wait to buy approach for now with respect to Moderna, some analysts suggest that Moderna is a buy-and-hold-forever type of stock. If true, Moderna is a better pick than Astec-Zeneca, especially if you believe that good things come to those who wait.
Of the 2 stocks, Moderna vs. AstraZeneca, Moderna appears, at this point, to be a safer stock bet. Given its short-term revenue projections and current reputation, it outranks AstraZeneca as a stock pick.
The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.