The FDA allows Moderna Covid vaccine for use as booster shot: should you buy now?

Moderna Inc. (NASDAQ:MRNA) shares on Friday edged slightly higher after news the company’s covid-19 vaccine received a green light from the FDA for use as a booster shot. The FDA also greenlighted Pfizer Inc. (NYSE:PFE) and BionTech’s covid-19 vaccine for booster shot use.

The Food and Drug Administration has amended the authorizations granted the use of the two vaccines to allow booster shots amid rising cases of covid-19, even among the vaccinated. Both vaccines are messenger-RNA-based and can now be used as booster shots on those with weakened immune systems.

In a note, the acting FDA Commissioner Janet Woodcock wrote:

Should you invest in Moderna shares in Q3 2021?

Although Moderna shares have pulled back nearly 20% this week, the stock is still up more than 250% this year and a whopping 481% over the last 12 months. Furthermore, Moderna shares also trade at a steep price-earnings ratio of 49.20. However, its forward P/E ratio of just 18.27 suggests the stock could still be significantly undervalued.

Therefore, given Friday’s FDA update on covid-19 vaccine booster shots, the recent pullback in the MRNA stock price could be an opportunity to buy. However, investors may need to overlook its steep P/E ratio while betting on the continued successful deployment of the covid-19 vaccine.

Analysts expect earnings per share to decline this year before averaging an annual growth rate of about 16.80% over the next five years. Therefore, growth investors may find the MRNA stock compelling.

Technical overview: Moderna stock price predictions for August 2021

Technically, Moderna shares appear to have recently pulled back from overbought conditions in the 14-day RSI. As a result, the stock price now has more room up top to rebound. However, the downward pressure looks solid, meaning Moderna shares may fall further before bouncing back off critical support.

Therefore, optimistic investors can target short-term rebound profits at approximately $425.90 or higher at $458.12. Alternatively, investors can wait for the stock to fall further to the critical support levels at $372.14 and $340.49 before buying.

Bottom line: the case for buying the MRNA stock rebound

In summary, although Moderna shares are up more than 250% this year, the recent pullback presents an opportunity to buy before a rebound. Furthermore, Friday’s FDA update on booster shots could be the perfect catalyst for the rebound.