Moderna, Inc. (MRNA) in Cambridge, Mass., and Inovio Pharmaceuticals, Inc. (INO) in Plymouth Meeting, Pa., are two major biotech companies engaged in COVID-19 vaccine development. While MRNA’s vaccine is already being administered with the FDA’s emergency use authorization (EUA), INO’s DNA COVID-19 vaccine candidate is set to move to Phase III in Brazil.
The resurgence of COVID-19 cases due to its Delta variant’s rapid spread is hiking demand for vaccines. The COVID-19 vaccine market is expected to grow at a 7.6% CAGR to $19.50 billion by 2026. Given this backdrop, both MRNA and INO should benefit.
But while INO’s shares lost 26.3% in price over the past nine months, MRNA’s have surged 178.1%. MRNA is also a clear winner with 14.7% price gains versus INO’s 2.7% returns over the past month. But which of these stocks is a better pick now? Let’s find out.
On August 16, 2021, MRNA revised its supply agreement with the Government of Canada for up to 105 million doses of MRNA’s mRNA COVID-19 vaccine and its booster vaccine candidate (if authorized), for delivery through 2024. MRNA will supply 20 million doses each year, with an option for an additional 15 million doses. The FDA’s approval of MRNA’s vaccine will help the company to extend its market reach in the coming months.
Also last month, INO received regulatory authorization from Brazil’s ANVISA, the nation’s health regulatory agency, to initiate the global Phase 3 segment of its Phase 2/3 trial, INNOVATE (INOVIO INO-4800 Vaccine Trial for Efficacy), for INO-4800, its DNA vaccine candidate for COVID-19. INOVIO plans to conduct the global INNOVATE Phase 3 segment in multiple countries with partner Advaccine Biopharmaceuticals Suzhou Co., Ltd., an emerging clinical-stage immunotherapy company. The success of the Phase 3 trial will potentially offer INO the ability to market it as both a primary and a booster vaccine.
Recent Financial Results
For the fiscal second quarter, ended June 30, 2021, MRNA’s total revenues increased 6398.5% year-over-year to $4.35 billion. The company’s income from operations came in at $3.06 billion, versus a $122 million loss in the prior-year period. Its net income came in at $2.78 billion, versus a $117 million net loss in the year-ago period. Its EPS was $6.46, compared to a loss per share of $0.31 in the prior-year period. As of June 30, 2021, the company had $5.60 billion in cash and cash equivalents.
For its fiscal second quarter, ended June 30, 2021, INO’s total revenues increased 2.1% year-over-year to $272.82 million. The company’s loss from operations came in at $83.20 million for the quarter, representing a 150.8% year-over-year rise. While INO’s net income decreased 36.2% year-over-year to $82.14 million, its loss per share fell 44% to $0.39. The company had $58.93 million in cash and cash equivalents as of June 30, 2021.
Past and Expected Financial Performance
MRNA’s revenue and total assets grew at CAGRs of 231.7% and 116.1%, respectively, over the past three years.
Analysts expect MRNA’s EPS to increase 1696.6% year-over-year in the current quarter, ending September 30, 2021, 1614.8% in the current year, and decline 14.2% next year. Its revenue is expected to grow 8216.6% year-over-year in the current quarter, 2424.6% in the current year, and decline 7.4% next year. The stock’s EPS is expected to grow at a 16.8% rate over the next five years.
In comparison, over the past three years, INO’s total assets have grown at a 58.4% CAGR, and its revenue declined at a 443% CAGR.
INO’s EPS is expected to decline 400% year-over-year in the current quarter, ending September 30, 2021, 21.5% in the current year, and then increase 43.8% next year. Its revenue is expected to grow 311% year-over-year in the current quarter, 96.1% in the current year, and 1148.7% next year. Analysts expect the stock’s EPS to increase at a 45.8% CAGR over the next five years.
MRNA’s trailing-12-month revenue is almost 1086.7 times INO’s.
Also, MRNA’s ROE, ROA, and ROTC values of 72.4%, 24.3%, and 45.8%, respectively, compare with INO’s negative values.
In terms of non-GAAP forward P/E, MRNA is currently trading at 13.26x, versus INO’s negative 6.87x.
And in terms of forward EV/Sales, MRNA’s 7.40x is 4000.7% higher than INO’s 303.45x.
While INO has an overall F grade, which translates to Strong Sell in our proprietary POWR Ratings system, MRNA has an overall B grade, equating to Buy. The POWR Ratings are calculated considering 118 different factors, each weighted to an optimal degree.
MRNA has a B grade for Value, which is consistent with its lower-than-industry valuation ratios. MRNA’s 7.92x forward Price/Sales is 4.3% lower than the 8.28x industry average. However, INO’s C grade for Value reflects its stretched overvaluation. The company has a 394.08x forward Price/Sales, which is 4658.5% higher than the 8.28x industry average.
In terms of Quality, MRNA has been graded a B, in sync with its higher-than-industry profitability ratios. However, INO’s D grade for Quality is in sync with its negative trailing-12-month return on total capital.
Of the 506 stocks in the Biotech industry, INO is ranked #478, while MRNA is ranked #32.
Beyond what we’ve stated above, our POWR Ratings system has also rated MRNA and INO for Growth, Stability, Sentiment, and Momentum. Get all MRNA ratings here. Also, click here to see the additional POWR Ratings for INO.
Rising demand for vaccines, along with massive government investments, should benefit both MRNA and INO. However, we think its higher profitability and better growth prospects make MRNA a better buy here.
Our research shows that the odds of success increase if one bets on stocks with an Overall POWR Rating of Buy or Strong Buy. Click here to access the top-rated stocks in the Semiconductor & Wireless Chip industry.
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MRNA shares fell $2.67 (-0.64%) in after-hours trading Friday. Year-to-date, MRNA has gained 298.87%, versus a 21.98% rise in the benchmark S&P 500 index during the same period.
About the Author: Sweta Vijayan
Sweta is an investment analyst and journalist with a special interest in finding market inefficiencies. She’s passionate about educating investors, so that they may find success in the stock market. More...
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