Why Moderna Stock Is Crumbling
Moderna’s stock (NASDAQ: MRNA) has plummeted over 80% in the past year, largely due to challenges in its vaccine sales. Last year, the company announced lower sales projections in Europe following the European Union’s renegotiated vaccine supply contract with Pfizer and BioNTech. This news clubbed with the company’s underwhelming outlook significantly impacted investor confidence, leading to a more than 20% drop in Moderna’s stock during a single trading session after its Q2 earnings release in August last year. The stock has since experienced a downward spiral, declining from its 52-week high of approximately $150 in June of last year to its current price of $27. It is exactly this downside risk, versus relative upside tradeoffs we made – at scale, in constructing the Trefis High Quality (HQ) strategy that has clocked >91% return since inception, and outperformed the S&P.
Separately, see – 35% Downside For DocuSign Stock?
The primary reason for Moderna’s stock seeing such a downturn is a sharp decline in demand for its COVID-19 vaccine. After achieving extraordinary growth during the pandemic with its breakthrough mRNA vaccine, the company is now navigating a transition to a seasonal vaccine market, which has severely impacted sales.
The financial impact is evident in Moderna’s revenue figures. In the last twelve months, the company’s revenue stood at $3.1 billion, reflecting a large 83% fall from $18.9 billion in 2022 – a direct result of lower demand for its COVID-19 vaccine. This downward trend is expected to continue, with sales projected to fall further to around $2.1 billion in 2025.
Recent developments have exacerbated investor concerns. In January 2025, Moderna further lowered its 2025 sales forecast by $1 billion. The company also pushed back its break-even goal by two years due to delays in the development timeline for several key products.
A critical factor contributing to Moderna’s vulnerability is its limited product portfolio. Until its RSV shot entered the market last year, the COVID-19 vaccine was its only commercially available product. This heavy reliance on a single product left the company highly susceptible to fluctuations in demand, as the pandemic transitioned to an endemic phase. Surely, Moderna has shown promising clinical trial results for its skin cancer vaccine. In patients with phase three or four melanoma, the deadliest form of skin cancer, a combination of this vaccine and Merck’s well-established Keytruda immunotherapy led to a significant improvement in recurrence-free survival time. However, the launch of this vaccine is still a couple of years away, contingent on regulatory approvals.
It’s not just sales that are being impacted. Moderna’s Operating Income over the last four quarters was $-3.7 Bil, which represents a very poor Operating Margin of -118.8%. Also, Moderna’s Operating Cash Flow (OCF) over this period was $-3.1 Bil, pointing to a very poor OCF Margin of -97.2%.
In essence, Moderna capitalized on the unprecedented demand during the pandemic, but is now facing the challenges of a normalized market. The company is actively working to diversify its revenue streams, but the rapid decline in COVID-19 vaccine sales has outpaced its ability to quickly offset these losses, leading to the substantial drop in its stock price.
The situation with Moderna highlights the risks of investing heavily in a single stock. Building a diversified portfolio is crucial for balancing risk and reward. For example, the Trefis High Quality (HQ) strategy, which focuses on balancing risk and reward, has outperformed the S&P 500, Nasdaq, and Russell 2000 since its inception.
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