Shares of Moderna (MRNA -2.90%) plummeted 58% in 2024, ranking among the worst performers in the S&P 500 index. The biotech company, renowned for its pioneering development of vaccines based on messenger RNA (mRNA), has struggled to manage weak sales of COVID-19 vaccine and sluggish market adoption of its new shot for respiratory syncytial virus (RSV). The stock price sell-off has continued into 2025, already falling 15% year to date, on the heels of slashing its full-year revenue guidance.
While the headline numbers don't inspire much confidence, Moderna is a stock that deserves a closer look. The company still has several fundamental strong points, including an extensive pipeline of therapeutics in clinical trials that could be the booster shot the stock needs to sustain a rebound.
Let's discuss the pros and cons of buying Moderna stock now.
Falling sales are pressuring the stock
It's been more than four years since Moderna rose to international prominence, receiving one of the first emergency use authorizations from the U.S. Food and Drug Administration (FDA) for its landmark COVID-19 vaccine in late 2020. The shot played an instrumental role in tackling the global pandemic, translating to a windfall for the company with record sales and profits through 2022.
Despite early projections that suggested the health crisis would require annual vaccinations to manage recurring waves of the virus, the anticipated demand failed to materialize. This shift can be attributed to evolving public sentiment, the emergence of competing therapeutics, and the withdrawal of emergency government funding for public immunization programs.
Through the first nine months of 2024, Moderna's revenue of $2.3 billion represents a 44% decline year over year. This figure includes a mere $10 million in sales of the new RSV vaccine following its third-quarter launch, underscoring the company's continued dependence on its COVID shot, commercialized as Spikevax. Although the company has made progress in reducing costs and improving financial efficiency, the year-to-date earnings-per-share (EPS) loss of $6.37 only narrowed the $12.89 loss per share last year.
The persistent top-line weakness continues to weigh on the stock. At a recent investor conference, Moderna delivered another setback by revising its 2025 sales forecast downward. The company now projects full-year revenue of between $1.5 billion and $2.5 billion, marking a $1 billion reduction from its previous forecast of $2.5 billion to $3.5 billion announced last September. Moreover, Wall Street analysts expect the company to remain unprofitable for the foreseeable future.
Here's a quick overview of the trajectories involved:
Revenue:
- 2023: $6.85 billion
- 2024 (estimated): $3.0 billion to $3.1 billion
- 2025 (estimated): $1.5 billion to $2.5 billion
Revenue decline, year over year:
- 2023: 40.6%
- 2024 (estimated range): 56% to 55%
- 2025 (estimated range): 51% to 18%
Value in the clinical pipeline
Moderna's strategy in 2025 focuses on maintaining its COVID-19 immunization market share while advancing its late-stage candidate pipeline. Within respiratory vaccines, the company anticipates FDA approval for an expanded indication of its RSV vaccine. Furthermore, the company has submitted a combination influenza-COVID vaccine for approval, supported by positive phase 3 study data.
Beyond respiratory applications, the company's non-respiratory portfolio offers perhaps the most exciting prospects, including vaccines for norovirus and cytomegalovirus (CMV). There is also the promising mRNA-4157, being studied in collaboration with Merck, which shows potential across multiple cancerous tumor types. This diverse pipeline exemplifies Moderna's roadmap to extend its mRNA technology into new categories, positioning itself as a more diversified and mature commercial-stage biotech company.
These developments align with Moderna's ambitious goal of securing 10 product approvals within the next three years, targeting a compound annual revenue growth rate (CAGR) exceeding 25% between 2026 and 2028. Notably, the company maintains a robust balance sheet to support these objectives, with a last-reported cash position of $9.2 billion -- a significant sum relative to its current market capitalization of $13.1 billion. Investors confident in the company's ability to orchestrate a turnaround may view the current stock price as an attractive entry point for a long-term holding.
Image source: Getty Images.
Decision time: I'm on the sidelines
The allure of Moderna as an investment lies in its proven leadership in mRNA technology. Nevertheless, securing a second blockbuster drug will be crucial for the company's sustainability.
Given the poor sales trajectory and numerous uncertainties about the company's near-term prospects, I haven't seen enough to consider buying the stock with conviction. Ultimately, investors may find more compelling opportunities elsewhere.
