Moderna (MRNA 0.90%) shareholders have been having a rough time lately. The biotech stock rocketed higher last spring, but the gains didn't last long.
Since reaching a peak last May, Moderna stock has tumbled by about 79%, and investors are starting to wonder if it could be a bargain now.
Here's a look at what's been pressuring the formerly high-flying biotech stock to see if it can bounce back from the severe beating it's received over the past several months.
Why Moderna Stock is getting hammered
On Jan. 13, Moderna provided business and pipeline updates at the annual JPMorgan Healthcare Conference. There was good news to share, but the market focused on a declining sales forecast and hammered the stock lower.
Last November, Moderna said it expected 2024 revenue to land in a range between $3 billion and $3.5 billion. On Jan 13, it narrowed that range to somewhere between $3 billion and $3.1 billion.
In addition to reporting 2024 revenue at the lower end of its previous guided range, Moderna issued a disappointing forward outlook. Now, management expects 2025 revenue to fall into a range between $1.5 billion and $2.5 billion. The lower end of the range represents a roughly 50% revenue reduction.
Another year of sinking revenue isn't what investors were expecting last May when mRESVIA, its respiratory syncytial virus (RSV) vaccine, earned approval from the Food and Drug Administration (FDA) to protect adults aged 60 and older.
Unfortunately, there's already a lot of competition in the RSV vaccine space. Moderna's mRESVIA must contend with Abrysvo from Pfizer and Arexvy from GSK. Both competing vaccines had nearly a yearlong head start in the U.S. market.
The good news for Moderna
In 2024, mRESVIA contributed minimal sales, but the vaccine could pick up the pace in 2025. The company has already filed an application with the FDA to expand access to adults under 60.
Sales of COVID-19 vaccines have plummeted, but they aren't insignificant. Last year, Moderna shared positive phase 3 results for a next-generation COVID-19 vaccine that could earn approval on or before May 31, 2025.
In addition to potential revenue from mRESVIA and a new COVID-19 vaccine, Moderna could receive approval from the FDA for a new seasonal flu/COVID shot tentatively named mRNA-1083 this year.
Moderna's vaccine pipeline isn't likely to stop at flu, COVID, and RSV. A cytomegalovirus (CMV) vaccine candidate, mRNA-1647, is in the middle of a pivotal phase 3 trial that will read out results later this year. The company is also running a phase 3 trial for a norovirus vaccine candidate that could produce efficacy data this year, depending on how rapidly new cases of the wintertime stomach bug accrue.
MRNA Total Operating Expenses (TTM) data by YCharts
Moderna's operations burned through $2.7 billion during the 12 months that ended last September, but the company is finally getting a handle on operating expenses that declined significantly in 2024. In 2025, management expects to reduce operating expenses by another $1 billion.
This drugmaker will likely continue reporting net losses in 2025, but Moderna finished 2024 with about $9.5 billion in cash to fund operations.
A buy on the dip?
Moderna shares have been beaten down a long way, and by some metrics appear inexpensive. At recent prices, the stock still sports an enterprise value of $6.4 billion, which is about 3.2 times the midpoint of management's sales guidance range this year. That seems like a very reasonable price when you consider commercial-stage biotech stocks tend to trade for mid-single-digit multiples of trailing-12-month sales.
Before you reach for your brokerage application and fill your portfolio with this stock, it's important to remember that vaccine sales can be unpredictable. While Moderna could outperform, this stock is too dangerous for anyone whose risk tolerance level isn't extremely high.
