BioNTech SE (BNTX) develops and commercializes immunotherapies for cancer and other infectious diseases. On the other hand, Moderna (MRNA) develops therapeutics and vaccines based on messenger RNA to treat infectious diseases, immuno-oncology, rare diseases, cardiovascular diseases, and auto-immune diseases.
The biotech industry thrived amid the pandemic due to substantial capital inflows to develop an effective vaccine to contain the spread of the deadly virus. The companies that succeeded in developing a vaccine and got the approval for commercialization garnered significant returns.
The industry is expected to remain in the limelight as the COVID-19 continues to be a matter of concern. Also, the industry’s focus on developing personalized medicines and immunotherapy is expected to be a major trend shaping the industry’s growth in the near term. The U.S. biotechnology market is estimated to grow at a CAGR of over 9.2% through 2027. Being major market players, both MRNA and BNTX are expected to benefit from the industry tailwinds.
MRNA has gained 207% over the past six months, while BNTX has returned 189.3% over the period. Also, MRNA’s 262.7% gains year-to-date are slightly better than BNTX’s 240.3% returns. Furthermore, MRNA is the clear winner with 437.3% gains versus BNTX’s 315% in terms of the past year’s performance.
But which stock is a better buy now? Let’s find out.
On September 24, MRNA announced its supply agreement with the government of Peru for 20 million doses of MRNA’s COVID-19 vaccine. “We are committed to making our vaccine available around the world as we seek to address the pandemic with our COVID-19 vaccine,” said Corinne Le Goff, Pharm.D., M.B.A, Chief Commercial Officer of Moderna.
On September 22, Pfizer (PFE) and BNTX announced the U.S Food and Drug Administration (FDA)’s emergency use authorization of a booster dose of the Pfizer-BioNTech Covid-19 vaccine. This should generate an additional stream of revenues for the companies following the vast approval and rollout of their Covid-19 vaccine.
MRNA’s total revenues increased 6,398.5% year-over-year to $4.35 billion in its fiscal second quarter ended June 30. Its income from operations stood at $3.06 billion, up 2,609.8% from the same period last year. Its net income improved by 2,476.1% from its year-ago value to $2.78 billion. The company’s EPS increased 2,183.9% year-over-year to $6.46.
BNTX’s revenues increased 12,630.2% year-over-year to €5.31 billion ($6.18 billion) in its fiscal second quarter ended June 30. Its operating income grew 5,289.6% from its year-ago value to €4.20 billion ($4.89 billion), while its profit for the period improved 3,256.5% year-over-year to €2.79 billion ($3.24 billion). BNTX’s EPS improved by 2,934.2% year-over-year to €10.77.
Expected Financial Performance
Analysts expect MRNA’s revenue to increase by 1,193.3% in the next quarter and 2,406.1% in the current year. The company’s EPS is expected to grow by 1,669.6% in the next quarter and 1,595.4% in the current year. Furthermore, its EPS is expected to grow at a 16.8% rate per annum over the next five years.
In comparison, analysts expect BNTX revenue to increase by 1,132.4% in the next quarter and 3,193.1% in the current year. The company’s EPS is expected to grow 432.3% in the next quarter, 58,000% in the current year, and 7.8% in the next year.
BNTX is more profitable with a gross profit margin and EBITDA margin of 73.40% and 71.77% versus MRNA’s 59.02% and 55.82%, respectively.
Also, BNTX’s ROE, ROA, and ROTC of 133.85%, 68.31%, and 107.73% compare with MRNA’s 72.43%, 24.30%, and 45.77%, respectively.
Thus, BNTX is the more profitable stock here.
In terms of forward EV/Sales, MRNA is currently trading at 7.26x, which is 54% higher than BNTX, which is currently trading at 3.34x. Also, MRNA’s forward EV/EBITDA ratio of 9.99 is 56.8% higher than BNTX’s 4.32.
Thus, BNTX is relatively affordable here.
BNTX has an overall rating of B, which equates to Buy in our proprietary POWR Ratings system. On the other hand, MRNA has an overall rating of C, which translates to Neutral. The POWR Ratings are calculated considering 118 different factors, with each factor weighted to an optimal degree.
BNTX has a B grade for Sentiment, which is justified as out of the eight Wall Street analysts that rated BNTX, four rated it Buy, while the other four rated it Hold. On the other hand, MRNA has a C grade for Sentiment. Among the 12 Wall Street analysts that rated MRNA, three rated it Buy, seven rated it Hold, while two rated it Sell.
Both the stocks have a Growth grade of B, in sync with their expected revenue and earnings growth.
Of the 505 stocks in the Biotech industry, BNTX is ranked #26, while MRNA is ranked #38.
Both MRNA and BNTX are prominent biotech players, contributing significantly to the industry’s growth. However, relatively higher profitability and cheaper valuation make BNTX a better bet here.
Our research shows that odds of success increase when one invests in stocks with an Overall Rating of Strong Buy or Buy. View all the top-rated stocks in the Biotech industry here.
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MRNA shares were trading at $387.27 per share on Thursday afternoon, up $8.37 (+2.21%). Year-to-date, MRNA has gained 270.70%, versus a 16.86% rise in the benchmark S&P 500 index during the same period.
About the Author: Subhasree Kar
Subhasree’s keen interest in financial instruments led her to pursue a career as an investment analyst. After earning a Master’s degree in Economics, she gained knowledge of equity research and portfolio management at Finlatics. More...
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