Moderna (NASDAQ: MRNA) stock has faced a steep decline this year, dropping by 36%. While such a dramatic fall may raise concerns among investors, it’s worth considering that this level of volatility isn’t entirely new for the vaccine maker. For example, during the 2022 inflation shock, MRNA stock plunged by an even greater 86%. On the other hand, in 2020, despite the initial uncertainty surrounding the pandemic, the stock only dipped by 9%. This resilience in 2020 can be linked to the company’s critical role in developing a COVID-19 vaccine, which significantly boosted its valuation during that period. For investors exploring potentially more stable and high-performing options, the Trefis High Quality portfoliois worth considering. This strategy has surpassed the broader market, delivering over 75% returns since inception, as shown by its HQ performance metrics.
Moderna’s Fundamental Strength Remains Weak
In addition to market pessimism, Moderna’s business fundamentals also remain under pressure.
Products & Pipeline
- The company currently markets two products: the COVID-19 vaccine and the RSV vaccine, which was approved in May 2024. Despite this limited portfolio, its development pipeline shows promise.
- Moderna has reported encouraging clinical results for its skin cancer vaccine. In patients with stage three or four melanoma—the most deadly form of skin cancer—the vaccine combined with Merck’s Keytruda significantly extended recurrence-free survival.
- The pipeline also features vaccines for other latent viruses, such as Cytomegalovirus (mRNA-1647) in Phase 3 trials, and investigational vaccines for Epstein-Barr Virus and Herpes Simplex Virus.
Revenues Have Taken A Massive Hit
- Moderna’s revenue has dropped sharply in recent years due to waning demand for its COVID-19 vaccine.
- Over the last three years, its revenue has declined at an average annual rate of 36.8%.
- In the last twelve months, revenue plunged by 52.6%, from $6.8 billion to $3.2 billion.
- This downtrend has continued, with quarterly revenue falling 66.0% year-over-year to $956 million from $2.8 billion.
- The RSV vaccine didn’t contribute significantly to 2024 revenue because distributors placed orders before regulatory approval was granted. However, sales are expected to ramp up this year.
Moderna Is Losing Money
- Moderna’s profit margins are among the weakest across companies covered by Trefis.
- This is evident in its operating income over the past four quarters, showing a loss of $-3.9 billion and a margin of -123.3%.
- Likewise, operating cash flow during this period was negative $-3.0 billion, with a poor OCF-to-Sales Ratio of -93.9%.
But, Moderna’s Balance Sheet Is Strong
- Despite current financial struggles, Moderna maintains strength in its balance sheet.
- As of the last quarter, its debt stood at $747 million, versus a market cap of $10 billion (as of April 9, 2025), resulting in a favorable Debt-to-Equity Ratio of 7%—generally considered healthy.
- Additionally, it holds a robust Cash-to-Assets Ratio of 50%, with $7.0 billion in cash and equivalents comprising a large portion of its $14 billion total assets.
The Value Proposition
MRNA stock trades at 3.2x trailing revenue, in line with the S&P 500’s 3.2x, but well below its three-year average P/S ratio of 4.8x. Although the company has faced operational and financial challenges that have driven its stock down over 90% from 2021 highs, there is still a compelling investment case. Moderna’s strong vaccine pipeline—several in late-stage trials—positions it for a potential turnaround. For long-term investors willing to ride out volatility, the current valuation could offer attractive upside. The average analyst price target of $52 implies a potential 2x return.
Navigating Market Irrationality
Despite reduced demand for its COVID-19 vaccine leading to a significant decline, Moderna has the potential to recover strongly. Its extensive pipeline and solid balance sheet offer a promising outlook when investor sentiment improves.
Markets can stay irrational longer than expected, especially when fear dominates. For investors with a long-term perspective and strong conviction, the current pullback could be an opportunity. Those more cautious may want to consider hedged strategies or diversify through a broader portfolio, such as the Trefis Reinforced Value Portfolio, which has outpaced its all-cap benchmark (a combination of the S&P 500, S&P MidCap, and Russell 2000 indices). Consulting a financial advisor familiar with bear markets may also help. Staying calm and strategic through volatility is key to building wealth.
Invest with Trefis
Market Beating Portfolios | Rules-Based Wealth