It's been nearly five years since Moderna (MRNA -1.13%) emerged as a biotech industry disruptor, with its COVID-19 vaccine playing a landmark role in tackling the global pandemic in late 2020. Despite its generating record sales and profits through 2022, early projections of sustained demand for coronavirus vaccinations failed to materialize, leading to a sharp drop in the business. Shareholders haven't been immune to a deep reset in the company's expectations, with the stock losing 92% of its value from its all-time high.
Yet, not all is lost for Moderna, which maintains some key fundamental strengths, including an extensive pipeline of new product candidates and a strong balance sheet supporting a more positive, long-term outlook. Here are five things you should know if you're considering buying Moderna stock now.
1. An mRNA innovator
Moderna is recognized as a pioneer in messenger RNA (mRNA) technology, seen as a potential game changer in medicine. This technology uses the body's cellular machinery to fight diseases by directing cells to produce proteins that trigger a specific immune response or address a particular health issue. As proven by the success of the Spikevax COVID-19 vaccine, Moderna aims to build on this achievement by expanding into applications for influenza, cancer, and rare diseases.
2. Post-pandemic revenue slump
In recent years, the challenge for the company has been managing the steep revenue decline following the pandemic's peak. Shifting sentiment about the need for annual booster vaccination, competition from alternative therapeutics, and the withdrawal of emergency government funding for public immunization programs have left the COVID-19 vaccine business a shell of the cash cow it was just a few years ago.
Total company revenue fell from a peak of $19.3 billion in 2022 to $3.2 billion for the full year ended Dec. 31, 2024. For 2025, Moderna forecasts total company sales of between $1.5 billion and $2.5 billion, reflecting its struggle to find a new blockbuster drug.
3. The RSV vaccine stumble
Adding to Moderna's woes, its highly anticipated respiratory syncytial virus (RSV) vaccine, known as mRESVI and approved by the Food and Drug Administration (FDA) in 2024 as the company's only other commercialized product beyond Spikevax, has faced a sluggish rollout. Global uptake has been slow, with low demand for its current indication to protect adults aged 60 years and older from lower respiratory tract disease caused by RSV infection, generating just $25 million in sales last year.
Despite efforts to control costs and improve financial efficiency, Moderna reported a net loss of $3.6 billion last year, or a loss of $9.28 per share, only modestly improved from a loss of $12.33 in 2023. Moreover, Wall Street analysts expect the company to remain unprofitable for the foreseeable future.
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4. A promising candidate pipeline
Moderna's near-term strategy focuses on driving the use of the mRESVIA and Spikevax vaccines, including through expanded indications. Nevertheless, its long-term potential hinges on the prospects of a pipeline of late-stage mRNA-based candidates, with a company goal of delivering 10 product approvals through 2027.
This includes vaccines for norovirus and cytomegalovirus, with data readouts expected this year. Perhaps the most promising is mRNA-4157, a personalized therapeutic cancer vaccine in phase 3 trials for treating melanoma, along with renal cell carcinoma and bladder cancer in phase 2 studies. Its potential to transform oncology with a tailored immune approach could position Moderna as a major player in cancer therapeutics.
The good news is that Moderna's balance sheet, with $9.5 billion in cash and investments at the end of 2024, provides the financial flexibility to pursue these ambitious objectives. Following a steep sell-off, the stock now trades at a more balanced valuation of roughly 4 times sales as a price-to-sales (P/S) ratio, offering a potentially attractive entry point for investors convinced of the company's long-term opportunity.
The big picture for investors
Moderna faces a steep challenge in restoring investor trust in the stock market, and 2025 could prove to be a defining year for validating its business strategy. While I believe it's premature to adopt a decisively bullish stance on the stock, its opportunity in mRNA-based medicines makes it worth keeping on your radar and following company developments closely.
