Moderna Stock To $22?

Moderna (MRNA) stock has fallen 7.5% during the past day, and is currently trading at $32.29. Our multi-factor assessment suggests that it may be time to sell MRNA stock. We have, overall, a pessimistic view of the stock, and a price of $22 may not be out of reach. We believe there are several things to fear in MRNA stock given its overall Weak operating performance and financial condition. In addition, keeping in mind its High valuation, we think that the stock is Unattractive.

Below is our assessment:

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Let’s get into details of each of the assessed factors but before that, for quick background: With $13 Bil in market cap, Moderna develops mRNA-based therapeutics and vaccines for infectious, immuno-oncology, rare, cardiovascular, and autoimmune diseases, with 44 development programs and 26 clinical trials across seven modalities.

[1] Valuation Looks High

This table highlights how MRNA is valued vs broader market. For more details see: MRNA Valuation Ratios

[2] Growth Is Very Weak

• Moderna has seen its top line shrink at an average rate of -52.3% over the last 3 years
• Its revenues have fallen -56% from $5.1 Bil to $2.2 Bil in the last 12 months
• Also, its quarterly revenues declined -46.0% to $1.0 Bil in the most recent quarter from $1.9 Bil a year ago.

This table highlights how MRNA is growing vs broader market. For more details see: MRNA Revenue Comparison

[3] Profitability Appears Very Weak

• MRNA last 12 month operating income was $-3.5 Bil representing operating margin of -157.3%
• With cash flow margin of -89.8%, it generated nearly $-2.0 Bil in operating cash flow over this period
• For the same period, MRNA generated nearly $-3.1 Bil in net income, suggesting net margin of about -141.5%

This table highlights how MRNA profitability vs broader market. For more details see: MRNA Operating Income Comparison

[4] Financial Stability Looks Very Strong

• MRNA Debt was $734 Mil at the end of the most recent quarter, while its current Market Cap is $13 Bil. This implies Debt-to-Equity Ratio of 5.9%
• MRNA Cash (including cash equivalents) makes up $4.5 Bil of $12 Bil in total Assets. This yields a Cash-to-Assets Ratio of 37.1%

[5] Downturn Resilience Is Weak

MRNA has fared worse than the S&P 500 index during various economic downturns. We assess this based on both (a) how much the stock fell and, (b) how quickly it recovered.

2022 Inflation Shock

• MRNA stock fell 85.7% from a high of $484.47 on 9 August 2021 to $69.51 on 9 November 2023 vs. a peak-to-trough decline of 25.4% for the S&P 500.
• The stock is yet to recover to its pre-Crisis high
• The highest the stock has reached since then is $166.61 on 27 May 2024 , and currently trades at $32.29

 
2020 Covid Pandemic

• MRNA stock fell 42.7% from a high of $94.85 on 17 July 2020 to $54.34 on 8 September 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 16 November 2020

But the risk is not limited to major market crashes. Stocks fall even when markets are good – think events like earnings, business updates, outlook changes. Read MRNA Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.

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