Moderna's Stock Plunge: A Deep Dive into the Biotech Giant's Recent Struggles

Moderna Inc. (MRNA) stock experienced a significant decline last week, with shares dropping by 21.2% through 10:20 a.m. ET on Monday, February 10, 2025. The stock price fell to $33.50, reflecting investors' concerns about the company's financial outlook and future prospects. This article explores the factors contributing to Moderna's stock price decline and analyzes the implications for investors.



Slower Sales Growth and Lower Guidance

Moderna's sales growth has been slowing down, and the company's guidance for 2024 and 2025 was lower than expected. In 2024, the company estimates sales of $3 billion to $3.1 billion, and for 2025, it projects sales of $1.5 billion to $2.5 billion. This implies a potential 52% decline in sales this year, which is concerning for investors.



Shift in Business Model

As the COVID-19 pandemic becomes endemic, Moderna is shifting its business model to treat the virus as a seasonal illness rather than a novel and spreading pandemic. This change in strategy may lead to lower sales and profitability in the long run.

Cost-cutting Measures

While the company has cut its "cash operating cost by over 25 percent compared to 2023," it plans to make further cuts of $1 billion in 2025 and $500 million more in 2026. These cost-cutting measures suggest that the company is facing financial pressures and may struggle to maintain profitability.

Missed Analyst Expectations

Moderna's guidance for 2025 sales missed Wall Street's goal by at least 14% in the most optimistic scenario and by 31% at the midpoint of management's guidance. This indicates that the company's performance may not meet investors' expectations.

Delayed Profitability

Most analysts polled by don't see Moderna turning profitable again until 2029 at the earliest. This long wait for profitability may deter investors from buying the stock.

Failed Clinical Trial

An independent data and safety monitoring board said Moderna's experimental CMV shot didn't show early effectiveness in a Phase 3 study. This failure means the company will need to continue testing the vaccine, which could lead to additional costs and delays.

Implications for Investors

Moderna's revised sales guidance and missed analyst expectations have significantly impacted the company's valuation and investor sentiment. The stock price decline reflects investors' concerns about the company's future growth prospects and profitability. As the COVID-19 pandemic becomes endemic and demand for vaccines decreases, Moderna's sales are expected to decline in the coming years. This shift in business dynamics raises questions about the company's ability to maintain profitability and grow its revenue in the long term.

Investors should carefully consider these factors when deciding whether to hold, buy, or sell the stock. While Moderna's cost-cutting measures have helped maintain profitability, the company still faces challenges in the coming years. To maintain profitability, Moderna will need to continue implementing cost-cutting initiatives and exploring new revenue streams, such as its experimental RSV vaccine, which it expects to get U.S. regulatory approval by May 12, 2023.

In conclusion, Moderna's stock price decline last week reflects investors' concerns about the company's financial outlook and future prospects. The company's revised sales guidance, missed analyst expectations, and delayed profitability have contributed to the stock's decline. As the COVID-19 pandemic becomes endemic, investors should carefully consider the implications of these factors when deciding whether to hold, buy, or sell the stock.