Moderna Stock is a “ Buy and Hold Forever ” type of investment

As one of the first companies to gain approval for its Covid-19, there is no doubt that Modern (NASDAQ:RNAm) is currently one of the best investments on the market. In 2020, Moderna shares rose some 434% with the promise of more benefits to come.

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And as the inoculation of the masses continues, the momentum of this stock doesn’t appear to be slowing down anytime soon. Some even call it the investment of the decade.

So, with a vaccine expansion plan under development and new formulations under development, Moderna’s stock is definitely worth keeping for the long term.

Moderna Stock has a long growth track

For many biotech companies, the quest to produce a Covid-19 vaccine in an accelerated timeframe was by no means an easy task. While many companies eventually produced a successful formula, one topic we heard repeatedly was messenger RNA (mRNA). It’s because Pfizer (NYSE:PFE), BionTech (NASDAQ:BNTX) and Moderna were among the companies able to incorporate the molecule into their candidate vaccines.

While mRNA vaccines are able to effectively treat Covid-19, that’s only part of the appeal. According to research, mRNA is a nucleic acid that can tell our cells to make any kind of protein we want. Ultimately, this means that more mRNA vaccines can be developed and used to cure a number of diseases, such as cancer.

With this in mind, following the release of its new coronavirus vaccine, Moderna also announced three new development programs for infectious diseases – vaccines against seasonal influenza, HIV and the Nipah virus. Shares of the stock rose 4% after these details were released. Additionally, adding to the rally, mRNA also announced that it was working on a vaccine to combat the South African variant of Covid-19. Shares climbed 10% the next day.

Thus, Moderna has succeeded in creating a successful Covid-19 vaccine and the demand for this drug will continue to be high for years to come. But the stock also has a lot more to offer in the long run. In fact, the company’s mRNA technology will allow it to develop new treatments at an accelerated rate. This is a long-term game changer for Moderna stocks.

What do the numbers look like?

Clearly, Moderna’s coveted mRNA technology offers the company a huge opportunity for growth. However, it’s also worth looking at the company’s financial data to decipher the long-term returns of this investment.

At its current price, Moderna stock has a market capitalization of $ 65 billion. For a company of its size, this is a huge assessment. Nonetheless, a strong market capitalization is not a major cause for concern, given the income potential of the company. Experts estimate that the profits from distributing new coronavirus vaccines will amount to $ 40 billion and that mRNA could “supply around 40% of the market.” According to Bernstein analyst Ronny Gal, the company will generate $ 13.5 billion in sales this year.

In terms of liquidity, the biotech giant also has $ 4 billion in cash reserves as of the third quarter of 2020. If it is likely to lose money on short-term spending, that stock will grow into a lot. more important as the income flows.

So, given the growing bottom line and strong liquidity position, there’s a good chance Moderna will be profitable by the end of 2021.

The bottom line

As cases continue to climb across the world, the rollout of vaccines to the masses will light up at the end of a very dark tunnel. For Moderna, revenue from its Covid-19 vaccines will also be a huge tailwind for its short-term stockpile. And as demand continues to be stable, stock prices are likely to skyrocket in the coming months. But MRNA also has legs for the long haul – I think Moderna is a “buy and hold forever” type of stocks.

The company’s mRNA technology will continue to help it develop innovative formulas to fight various diseases. In addition, capital from the novel mRNA coronavirus vaccine will help fund these projects. The only caveat is that many of these projects are still in development – it could take years before they are approved.

That said, the Moderna share has great long-term potential. It’s just the most ideal for risk-tolerant investors.

As of the publication date, Divya Premkumar does not hold (neither directly nor indirectly) any position in any of the securities mentioned in this article.

Divya Premkumar graduated in finance from the University of Houston, Texas. She is a writer and financial analyst who has written articles on a variety of financial topics, from investing to personal finance. Divya has been writing for InvestorPlace since 2020.