MRNA and More: 3 Stocks That Can Lose Up to 87% In the Next Year
30 July 2021 - 9:45PM
Finscreener.org
The markets have been on an absolute tear in the last 15 months.
Since the start of 2020, the S&P
500 has gained around 40% despite a global recession induced by
the ongoing pandemic. While the indexes are trading near record
highs, there are few stocks that remain vulnerable in the
near-term.
Here, we look at three such stocks that have significant
downside potential from current trading prices.
Moderna
One of the top-performing stocks on the NASDAQ, Moderna (NASDAQ:
MRNA), is
up a staggering 1,760% since it went public in late 2018. It has
more than tripled in 2021 and has gained 320% in the last year.
Moderna stock is currently trading at $340 valuing it a market cap
of $138 billion. Wall Street forecasts Moderna to increase sales by
2,180% to $18.32 billion in 2021. Comparatively, its earnings might
improve from a loss per share of $1.96 in 2020 to earnings of
$24.57 in 2021.
Moderna expects to produce between 800 million and 1 billion
COVID-19 doses in 2021 allowing the company to derive over $19
billion in sales this year. The company is one of the leading
COVID-19 vaccine manufacturers in the world but there is a chance
for sales to fall off a cliff once the pandemic is bought under
control.
For example, Moderna sales are estimated to fall by 16% to
$15.35 billion in 2022 while earnings might decline to $18.2 per
share as well. Analysts tracking the stock have a 12-month average
price target of $185 for MRNA stock which is 46% below its current
trading price.
Cronos Group
The second stock on my list is cannabis giant Cronos Group
(NASDAQ: CRON).
This Canada-based pot producer has severely underperformed the
broader markets in the last two years. CRON stock is trading 68%
below record highs and might lose another 20% from current
levels.
In 2021, analysts expect Cronos to increase sales by 55% to
$72.26 million. Comparatively, its also forecast to report a loss
per share of $0.62 this year. Given it has 371.66 million
outstanding shares, total losses will stand at $230 million in
2021. So, Cronos is expected to lose over $3 for every $1 in
sales.
Cronos ended Q1 with $1.24 billion in cash which means it has
enough liquidity to improve its profit margins without having to
dilute shareholder wealth. In the March quarter, its sales rose by
50% year over year to $12.6 million. However, it still reported a
negative gross margin and an operating loss of $43.5 million.
Cronos has just $9.36 million in debt and is backed by tobacco
giant Altria. The latter pumped in $1.2 billion into Cronos to
acquire a 45% stake in the company, back in 2018.
AMC Entertainment
One of the most
popular meme stocks in 2021, AMC Entertainment (NYSE:
AMC) can lose up to 87% in market value in the next year,
according to consensus price target estimates. AMC shares are up
close to 2,000% year to date primarily due to a group of retail
traders on Redditt who initiated a short-squeeze on the stock.
However, the company remains fundamentally weak as it ended Q1
with $813 million in cash and $11 billion in debt. It raised
capital in Q2 which will increase its cash balance to approximately
$2.2 billion in the June quarter. AMC also has $11 billion in debt
and is forecast to report an adjusted net loss of $3.16 per share
in 2021. It has 513 million outstanding shares so the net loss will
be over $1.6 billion.
Analysts also expect a
loss of $0.81 per share in 2022 which suggests AMC will have to
raise additional capital going forward, making it one of the
riskiest bets on Wall Street.
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