BioNTech (WKN: A2PSR2) has confirmed what the stock market has long feared with its latest figures. The days of gigantic sales and profits from the COVID-19 vaccine are coming to an end.
Doubts were already spreading among investors last summer as to whether the meteoric rise could continue for much longer. In fact, BioNTech has achieved an extremely impressive result in the last fiscal year that is not so easy to repeat. Sales have skyrocketed from EUR 482 million in the 2020 financial year to almost EUR 19 billion!
BioNTech is struggling with rapidly falling sales
At the same time, this also caused profits to explode. More than 10 billion euros are left after taxes. That is almost 40 euros net profit per share. In view of these figures, one had to wonder why the share price practically went into free fall immediately after reaching the all-time high of almost 400 euros per share.
Since the beginning of the year, the price has fluctuated between 180 and 120 euros. That’s a ridiculously low price relative to earnings per share.
But the figures for the second quarter show for the first time that the times of rising sales and profits are over. Compared to the same quarter of the previous year, both sales and profits have collapsed by around 40%. If you look at the first half of the year, BioNTech can still show growth. But that has to do with the fact that the number of vaccine doses produced was increased in the first quarter of last year. So BioNTech hadn’t reached its full potential yet.
In the second quarter, sales fell from EUR 5.3 billion in the previous year to EUR 3.2 billion. Profit fell from EUR 2.8 billion to EUR 1.7 billion. So BioNTech is miles away from getting into financial trouble. Rather, one is dealing with a luxury problem. Because the COVID-19 vaccine was extremely successful worldwide, but at the same time it was the company’s only approved product to date. And now BioNTech has to be measured by this success.
What does this mean for the share price?
In fact, it’s no surprise that sales are now falling. At the beginning of the year, BioNTech published a forecast for the full year, which predicted a decline in sales from COVID-19 vaccines by up to 30% to EUR 13 billion. The company once again confirmed this forecast a few days ago.
In the worst case, shareholders must therefore prepare themselves for further significant declines in sales. Because in the first half of the year sales were EUR 9.57 billion. In the worst case, less than 4 billion euros will be added in the second half of the year. That would mean sales would fall even further from last quarter’s weak levels. And with that, the profit would also continue to melt away.
Overall, it is therefore extremely difficult to assess whether the stock is currently cheap or not. Because nobody can say how the demand for vaccines will develop in the next few years. And so far there are no other products that could stabilize the profit. Therefore, the share price will probably continue to stagnate for the time being.