The coronavirus pandemic has resulted in strong rallies in the stocks of many companies that are involved in developing a vaccine for it. One such stock is that of Moderna Inc (NASDAQ:MRNA), which has made significant gains ever since the company came up with the ‘first testable vaccine’ for coronavirus.
However, it should be noted that the fact that many companies are working on similar products and the development of the first testable vaccine does not give Moderna any special advantage. Moreover, market experts believe that the stock had been quite richly valued even before the crisis hit, and hence, it is important to figure out whether it is worth owning the Moderna stock.
It is quite clear that the market is excited with regard to the company’s coronavirus vaccine, and Modena has stated that it will be made available to health care workers by fall this year. However, investors need to note that it would take more than a year for the vaccine to hit the shelves, if at all.
The company has other promising vaccines in the pipeline as well, but it remains an open question whether the stock is being overvalued due to the coronavirus vaccine. There are many things that can eventually go wrong, and hence, investors need to guard against recklessness.
The possibilities of the coronavirus vaccine have probably already been priced into the stock, and hence, the potential upside might not be as much as many might think. Moreover, a setback could result in a significant crash in the Moderna stock price.
Hence, it is safe to say that if investors are looking to make a bundle from stocks involved in developing coronavirus vaccines, then Moderna might not be the stock for that. Market experts believe that investors who have already bought MRNA due to the promise of the coronavirus vaccine should consider divesting.