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Moderna (NASDAQ:MRNA) was among the leading healthcare decliners in 2023 as demand for its COVID-19 vaccine fell. Shares of the mRNA-based vaccine and drug developer crashed this year while the broader healthcare sector remained flat. However, the stock bounced back last month, outperforming the S&P 500.
2023 stock performance
After an over-twofold rise in value in 2021, MRNA continued its slump into the second straight year with a ~45% loss in 2023, just as the demand for its only product, the Spikevax COVID-19 vaccine, dropped off.
Most recently, Moderna (MRNA) shares hit a 52-week low in early November after the company reported Q3 2023 results, signaling a return to losses, driven by ~46% YoY decline in the top line. However, the stock showed signs of recovery, indicating a ~39% rise since then, including a ~3% rise on Thursday to close at $100.73.
Over the past five years, the Cambridge, Massachusetts-based biotech has returned nearly 550%, while its industry peers, as represented by SPDR S&P Biotech ETF (XBI), have climbed only ~45%.
What do Quantitative Measures say
Moderna (MRNA) is a Strong Sell according to Seeking Alpha’s Quant Rating System, mainly weighed down by the F and D- grades it has received for growth and revision metrics, respectively. However, B- and C+ grades on its profitability and valuation partially offset the impact.
What does Wall Street say
Wall Street remains bullish on MRNA, with twelve analysts suggesting a Buy recommendation, including eight who have indicated it as a Strong Buy. In other words, 46% of the 26 analysts surveyed have a bullish stance on the biotech, while for the rest, it is a Hold or a Sell.
What do SA analysts say
MRNA is a Hold for Seeking Alpha analysts. However, analyst Muhammad Umair, who upgraded the stock to Buy from Hold in November, disagrees. The MRNA stock “is nearing a significant support level and exhibiting indications of reversing from this point,” he wrote in a recent article.
Meanwhile, author Biologics also retained his bullish view on the stock, citing the company’s prospects beyond Spikevax. Referring to a skin cancer therapy that MRNA co-develops with Merck (MRK), Biologics argued that the MRNA-based therapy “represents one of Moderna’s pipeline programs, diversifying the company’s portfolio and potentially shaping its future beyond the pandemic.”
However, SA contributor Stone Fox Capital reaffirmed his Sell rating a few days earlier, suggesting it “would be wise to not rush into Moderna.” Analyst Mark Holder points to MRNA’s “massive” cash burn, expensive ex-COVID prospects, and a lack of clarity on its return to growth in 2025.
Latest earnings
With its Q3 2023 financials, Moderna (MRNA) trailed analysts’ estimates for earnings following a $3.6B net loss it recorded due mainly to a $3.1B one-off charge related to organizational restructuring, among other matters. While its quarterly revenue exceeded estimates, sales for Spikevax slumped ~44% YoY to $1.8B from $3.1B in the prior year period.
Earnings predictions
For 2023, MRNA projects its product sales could reach at least $6B before sliding to ~$4B in 2024, ahead of a potential return to growth in 2025. Meanwhile, Wall Street projects a $13.77 loss per share on ~$6.5B in revenue for the company this year.
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