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Long term investing can be life changing when you buy and hold the truly great businesses. And highest quality companies can see their share prices grow by huge amounts. For example, the Moderna, Inc. (NASDAQ:MRNA) share price is up a whopping 578% in the last half decade, a handsome return for long term holders. And this is just one example of the epic gains achieved by some long term investors. It's also up 34% in about a month. But the price may well have benefitted from a buoyant market, since stocks have gained 43% in the last thirty days. We love happy stories like this one. The company should be really proud of that performance!
So let's investigate and see if the longer term performance of the company has been in line with the underlying business' progress.
Check out our latest analysis for Moderna
Because Moderna made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. When a company doesn't make profits, we'd generally expect to see good revenue growth. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.
For the last half decade, Moderna can boast revenue growth at a rate of 57% per year. That's well above most pre-profit companies. Fortunately, the market has not missed this, and has pushed the share price up by 47% per year in that time. It's never too late to start following a top notch stock like Moderna, since some long term winners go on winning for decades. On the face of it, this looks lke a good opportunity, although we note sentiment seems very positive already.
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
Moderna is well known by investors, and plenty of clever analysts have tried to predict the future profit levels. You can see what analysts are predicting for Moderna in this interactive graph of future profit estimates.
A Different Perspective
Moderna shareholders are down 41% for the year, but the market itself is up 21%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. On the bright side, long term shareholders have made money, with a gain of 47% per year over half a decade. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. Shareholders might want to examine this detailed historical graph of past earnings, revenue and cash flow.