The Covid-19 pandemic, which consumed every moment of our waking days and claimed over 1 million lives in the U.S. alone, had a most unique impact on the financial markets. One that, in my view, is here to stay.

It was not the pandemic itself, but the double whammy of easy monetary conditions and a spike in speculative stock market trading. That’s what may shape the rest of this decade. The liquidity genie just isn’t going back in the bottle any time soon. 

One of the poster child stocks for that life-altering era was Moderna (MRNA). As a reminder, here is its company description on Barchart’s Key Statistics page. 

Moderna, Inc. is a clinical-stage pharmaceutical company, primarily focused on discovering and developing messenger RNA (mRNA) based therapies. The company’s mRNA based COVID-19 vaccine, Spikevax (mRNA-1273), is approved for use in adults in the United States. The vaccine is also authorized for emergency use in several countries…

MRNA’s price chart from that time 5-6 years ago is a classic case of a stock being discovered directly due to a market event, then fading off the map. But in the case of MRNA, there’s at least a whiff of a second coming. 

This was MRNA’s pandemic breakout. The stock went from under $30 to over $350. In 18 months!

Looking at more recent history, the stock has been half that peak or below for nearly two years. This was not a dot-com era story, but it looks like one in the price chart. The glass-half-full types will look at this and say “a double in six years, that’s more than 10% a year.” 

Yes, but that doesn’t exactly tell the story, does it?

Hantavirus Revives Optimism on MRNA Stock. But Should You Buy It Now? 

Moderna shares have surged recently, gaining as much as 22% in a two-day span as investors scramble for a play on the emerging hantavirus threat. The catalyst was a deadly cluster of cases linked to an Atlantic cruise ship, which resulted in three fatalities and sparked international headlines. While the World Health Organization (WHO) has been quick to note that human-to-human transmission remains rare and this is not "the start of another pandemic,” the market’s muscle memory from 2020 is clearly twitching.

Fundamentally, Moderna is the natural first place to look here. Its long-standing, albeit early stage, research into hantavirus vaccines have again put it in the spotlight. The company has existing collaborations with the U.S. Army and Korea University, positioning it as the most credible mRNA candidate for this specific rodent-borne pathogen. However, a dose of reality is required: There is currently no approved vaccine for hantavirus, and Moderna itself describes its efforts as “early-stage and ongoing.” But since when has that stopped the stock market from surging? That’s where the old expression, “buy the rumor, sell the news” came from!

The risk here is a classic valuation disconnect. While MRNA is up sharply over the past 12 months, it is highly unlikely that a localized outbreak — even a tragic one — will generate the multibillion-dollar revenue streams seen during the Covid-19 era. Investors are currently buying the headline, but unless we see a significant acceleration in clinical trial timelines, this rally may prove as fleeting as the news cycle that birthed it.

Rob Isbitts created the ROAR Score, based on his 40+ years of technical analysis experience. ROAR helps DIY investors manage risk and create their own portfolios. For Rob's written research, check out ETFYourself.com.

More news from Barchart

• Berkshire Hathaway Just Upped Its Stake in Sumitomo Stock. Greg Abel Says It’s Holding for the Long Term.
• After Major Layoffs, Block Stock Is Staging a Turnaround. CEO Jack Dorsey Says AI Is Leading the Way.
• This Analyst Just Raised the Price Target on Coherent Stock by 50%. What to Know.
• CoreWeave Stock Falls as the AI Growth Story Slows Down