Pfizer Versus Moderna: Which is a Better Investment?

Both Modern and Pfizer have been in the news due to their successful COVID-19 vaccine trials. Both stocks rose on positive news, however, it will be months before the coronavirus vaccine is made available for purchase.

Both companies have signed major deals with international clients for bulk purchases of the vaccine once it comes out, but which is a better option from an investment perspective?

Moderna has risen more than 300 percent over the last year, whereas Pfizer has declined very slightly. The present scenario, however, is different with Pfizer having gained 2.6 percent since the announcement compared to Moderna’s 1.5 percent.

Let’s compare the two:

Latest Developments

Pfizer joined hands with two different companies – Gilead Sciences and BioNTech – to develop coronavirus vaccines. 

Its partnership with BioNTech proved to be a huge success and the company is preparing to release its first batch of vaccines next year. It has already signed major deals with the UK, Canada, and Japan.

On the other hand, Pfizer’s partnership with Gilead Sciences is to control and push the production of Gilead’s Remdesivir, which is the first FDA approved COVID-19 drug in the US.

Pfizer will manufacture and supply the drug for the next few years.

While Pfizer is doing well, Moderna isn’t behind either. Its vaccine is expected to come out in 2021. Just like Pfizer, Moderna has entered into agreements with several countries including the US, Qatar, the European Commission, the UK, Japan, and Canada.

Numbers and Finances

Pfizer:

  • Year-over-year 4 percent increase in revenue to $10.20 billion in the recently ended quarter. However, overall revenue took a hit due to decreased demand for other products.

Moderna:

  • Year-over-year 826.5 percent increase in revenue to $157.91 million in the recently ended quarter. However, the EPS took a hit due to increased research expenses.

Profitability

Pfizer’s trailing yearly revenue is about 197.2 times more than what Moderna generates. Moreover, PFE has a gross margin of 80.1 percent, a lot higher than Moderna’s negative values.

Pfizer wins this race.

Expected Performance

Pfizer:

  • The company’s EPS is expected to grow at a rate of 10 percent next year due to the coronavirus vaccine before settling at 3.7 percent over the next five years. 

Revenue is expected to grow 8 percent next year, 1.8 percent in the current quarter, and 9.2 percent in the next quarter.

Moderna:

  • The company’s EPS is expected to grow at a rate of 214 percent next year due to the coronavirus vaccine before settling at 16.8 percent over the next five years. 

Revenue is expected to grow by 1,125 percent next year, 961.5 percent in the current quarter, and 2,299 percent in the next quarter.

Moderna is expected to have a better future.

Valuation

Pfizer is more affordable than Moderna, which is trading at 103.49x. 

Moderna is 2,329.3 percent more expensive than Pfizer, which is trading at 4.26x. 

Which One to Buy?

Both Moderna and Pfizer are good options. The former has good potential but the latter is among the most reliable names in the industry. 

It is believed that Pfizer’s vaccine will hit the market before Moderna’s, which makes it a better buy as it might be able to cover a larger market.

Note: This is not investment advice.

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