Recent significant decrease in Moderna's share value by 21%.
Moderna's (MRNA -20.07%) sales are taking a dive, and so is its stock price. The biotech giant experienced a 21.2% plunge by 10:20 a.m. ET on Monday, following updates on its 2024 performance and predictions for 2025.
Moderna's 2024 and Beyond
Moderna estimated its 2024 product sales to fall between $3 billion and $3.1 billion. The company is shifting its focus from treating COVID-19 as a novel, spreading pandemic to managing it as an endemic illness. CEO Stéphane Bancel announced that Moderna had reduced its "cash operating costs by over 25 percent compared to 2023", with plans to slash costs further – by $1 billion in 2025 and $500 million in 2026. This strategy should boost profitability.
Alas, Moderna anticipates declining sales in its vaccine division in the coming year. Projections for 2025 range from $1.5 billion to $2.5 billion, implying a substantial drop in sales and potentially a 52% plummet. In order to stay afloat in this financial landscape, Moderna might need to make some serious cost cuts just to break even.
Moderna Stock: Buy or Sell?
Moderna's revenue projections took Wall Street by surprise, as analysts had previously predicted 2025 sales around $2.9 billion. In the best-case scenario, Moderna would still miss the mark by 14%. Meanwhile, at the midpoint of its guidance, Moderna would fall 31% short of analyst expectations.
The pandemic led to Moderna's remarkable surge in profitability, making it profitable in both 2021 and 2022. However, as the virus transitions to an endemic status, Moderna faces a long, arduous journey ahead.
While the majority of analysts surveyed by S&P Global Market Intelligence expect Moderna to return to profitability by 2029 at the earliest, this news, paired with the financial projections, may serve as a chilling deterrent for some investors.
Enrichment Insights:
- Future Prospects: Moderna's 2025 revenue primarily relies on Spikevax and mRESVIA vaccine sales, with most earnings concentrated in the second half of the year. The company is also diversifying its portfolio to address other health issues, aiming to generate long-term growth opportunities.
- Pipeline Updates: Moderna is developing a next-generation COVID-19 vaccine (mRNA-1283) and has positive Phase 3 data. The RSV vaccine (mRNA-1345) has received regulatory approval with positive Phase 3 results for high-risk adults. Moderna also has positive Phase 3 immunogenicity data for a flu/COVID combination vaccine (mRNA-1083).
- Potential Challenges: Decreased vaccine demand, strategic cost reductions, management of cash flow, and regulatory and market uncertainties pose challenges for Moderna in the post-pandemic market.
With reduced revenue and profitability forecasts, Moderna must navigate a complex landscape to maintain financial stability and growth in the post-pandemic era.
Investors might want to reconsider their approach to Moderna's stock, given the significant drop in its projected 2025 sales and potential need for cost cuts to break even. This shift in financial outlook could impact the company's long-term investing prospects in the finance sector.
In light of Moderna's revised financial projections and the transition of COVID-19 from a pandemic to an endemic illness, investors may need to reassess their strategies for managing their money in this sector.
