Last Friday, Moderna MRNA announced fourth-quarter 2024 results. Though earnings and sales beat estimates, both metrics declined significantly when compared to the previous year.

Adjusted loss was $2.50 per share against earnings of 55 cents in the year-ago quarter. Revenues declined 64% year over year to $966 million, primarily due to the declining sales of its COVID-19 vaccine and the soft sales performance of its recently launched RSV vaccine.

Moderna reiterated its total revenue guidance for 2025, which was issued last month. It expects total revenues to be in the range of $1.5-$2.5 billion, mainly from product sales of its COVID-19 and RSV vaccines. Owing to the seasonality of its business, management expects to generate around $0.2 billion in revenues in the first half of the year.

However, long-term investors do not bother much about a single quarter’s results and instead focus on strong fundamentals. Let’s understand Moderna’s strengths and weaknesses to better analyze how to play the stock in the post-earnings scenario.

Moderna’s Product Launch Plans Encouraging

Moderna expects to launch 10 new products over the next three years and has made considerable progress toward this goal. In fourth-quarter 2024, Moderna submitted three regulatory filings to the FDA, including those for mRNA-1283 (the next-generation COVID-19 vaccine) and mRNA-1083 (the COVID-19 and influenza combination vaccine). A final decision from the FDA on mRNA-1283 is expected by May 31, 2025.

The third regulatory filing seeks expanded use of the RSV vaccine mResvia in high-risk adults aged 18-59. A final decision on the mResvia filing is expected by June 12, 2025. Currently, mResvia is approved for use in older adults aged 60 and above.

With these product launches, management aims to boost the company’s revenues and reduce its dependence on the COVID-19 vaccine, which has been experiencing a significant decline due to lower vaccinations since the end of the pandemic.

MRNA’s Pipeline Progress Holds Potential

Management is also progressing well with the development of its pipeline candidates. Unlike traditional vaccines that can take months to produce, mRNA-based vaccines can be developed quickly and offer manufacturing scalability, which was observed in the case of COVID-19 vaccines. Because of this major advantage, Moderna received a project award of $590 million from the U.S. government to accelerate the development of an mRNA-based vaccine program to prevent the spread of the H5N1 virus (also known as bird flu) in humans.

Moderna has more than 40 mRNA-based investigational candidates in different stages of clinical studies, targeting various indications, including cancer. It is evaluating multiple candidates in late-stage studies, including mRNA-1647 (cytomegalovirus [CMV] vaccine), mRNA-1010 (influenza vaccine) and mRNA-4157/V940 (individualized neoantigen therapy).

mRNA-4157 is an important candidate garnering investors’ attention. It is being developed in partnership with Merck MRK. Moderna/Merck is evaluating this therapy in three pivotal late-stage studies — one in the melanoma indication and the other two in the non-small cell lung cancer area.

Moderna/Merck is also evaluating mRNA-4157 across separate mid-stage studies for cutaneous squamous cell carcinoma, renal cell carcinoma and muscle-invasive bladder cancer indications.

Data readouts from the late-stage studies on the CMV and influenza vaccines are expected later this year.

Competition in Targeted Markets: A Hurdle for Moderna

While Moderna's mRNA technology gives it a competitive edge, its products face competition from those of several large pharmaceutical players, such as Pfizer PFE and GSK plc GSK.

Last year, Moderna secured its first product approval outside the COVID-19 vaccine space when the FDA approved mResvia. Though several investors initially perceived this approval as a turning point for Moderna (as a means to diversify its revenue stream beyond COVID-19 vaccines), the underwhelming sales performance of this vaccine disappointed investors. The Moderna vaccine faces stiff competition from RSV vaccines Arexvy and Abrysvo, marketed by GSK and Pfizer, respectively.

MRNA Stock Performance, Valuation & Estimates

In the past year, MRNA stock has lost nearly 63%, significantly underperforming the industry’s 8% decline, as seen in the chart below. During this timeframe, the stock also underperformed the broader Medical sector and the S&P 500. Shares of Moderna are currently trading below its 200-day and 50-day moving averages.

MRNA Stock Underperforms Industry, Sector & S&P 500

Image Source: Zacks Investment Research

From a valuation standpoint, Moderna appears to be trading at a premium compared to the industry. Going by the price/sales (P/S) ratio, the company’s shares currently trade at 3.93, trailing 12-month sales value, higher than 2.16 for the industry.

Image Source: Zacks Investment Research

Estimates for Moderna’s 2025 loss per share have slightly improved from $8.74 to $8.72 in the past seven days.During the same period, estimates for 2026 loss per share have improved from $6.44 to $6.35.

Image Source: Zacks Investment Research

How to Play MRNA Stock?

We would advise short-term investors to steer clear of the stock for the time being as there is a negative sentiment around it. Management has slashed its sales guidance twice in the past six months and the soft sales performance of its RSV vaccine has investors concerned over top-line growth. The stock is also currently trading at a premium to the industry.

In our opinion, investors with a long-term horizon should stay invested, as this Zacks Rank #3 (Hold) company has a decent pipeline of products. The quick development of mRNA-based vaccines gives MRNA an edge over its rivals, especially those that are developing traditional vaccines. Consistently improving estimates highlight analysts’ outlook for growth.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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