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Moderna Stock Crashes to Lowest Point Post-COVID as Revenue Forecast Falls Flat

Moderna’s Stock Plummets to Post-COVID Lows Amid Disappointing Revenue Outlook

Shares of Moderna Inc. (MRNA) took a significant hit in early trading on Monday, falling nearly 20% after the biotechnology company issued a downbeat revenue forecast for the upcoming years. With projections indicating a steep decline in revenue and an announcement of accelerated cost-cutting measures, investors responded with alarm, driving the stock to its lowest value since April 13, 2020.

Revenue Forecast and Stock Response

Moderna’s recent announcement revealed that it anticipates revenue to fall by approximately one-third in 2025, with expectations ranging between $1.5 billion to $2.5 billion. At the midpoint of this guidance, this reflects a staggering 34% drop when compared to existing estimates. Analysts at FactSet had previously projected revenues of about $2.92 billion, making Moderna’s guidance all the more concerning. The company’s stock plunged by 19.8% in afternoon trading, representing one of its most significant daily selloffs since going public in December 2018.

Disappointing Sales Numbers

For the year 2024, Moderna reported product sales between $3.0 billion to $3.1 billion, with the majority stemming from sales of its COVID-19 vaccine, Spikevax. Comparatively, revenues from the recently launched mResvia vaccine targeting respiratory syncytial virus (RSV) were nearly negligible. This performance falls short of earlier estimates, which projected sales could be between $3.0 billion and $3.5 billion.

Financial Outlook and Cost-Cutting Strategy

Moderna also indicated an aggressive approach to cost management, with planned savings of $1 billion this year followed by an additional $500 million in 2025. The company’s cash reserves are projected to dip significantly, from $9.5 billion at the end of 2024 to around $6 billion by 2025. This forecasted cash burn of more than $3 billion for the year highlights the financial pressures facing the company.

Investor Sentiment and Analyst Insights

Responding to the news, Evercore ISI analyst Cory Kasimov indicated a likely increase in investor skepticism regarding Moderna’s future performance, maintaining a ‘in line’ rating and setting a price target of $60. Such sentiments reflect a broader unease within the investor community concerning the company’s viability post-COVID-19, particularly as the pandemic’s urgency fades.

Clinical Trials and Future Approvals

Adding to the company’s tumultuous circumstances, the Data Safety Monitoring Board—a committee of independent experts—recently stated that a late-stage trial for Moderna’s cytomegalovirus (CMV) vaccine candidate did not meet necessary efficacy benchmarks, which is a setback for its product lineup. Amid these challenges, Moderna is actively pursuing approvals for its next-generation COVID-19 vaccine and a combined flu-COVID vaccine. In a positive development, after gaining approval for mResvia for seniors aged 60 and above, Moderna has simultaneously sought authorization for high-risk adults aged 18 to 59.

Market Performance Overview

The fall of Moderna shares is particularly striking when viewed in the context of overall market performance. Over the past year, Moderna’s stock has plummeted by an alarming 60.1%. During the same period, the iShares Biotechnology ETF (IBB) has dropped only 3.2%, while the S&P 500 index has displayed a robust 21.8% increase. This sharp divergence emphasizes the difficult road ahead for Moderna as it navigates post-pandemic challenges and seeks to redefine its role in biotechnology and vaccine development.

Conclusion

In summary, Moderna’s stock decline to its lowest levels since the early days of the pandemic reflects deep investor concerns regarding future revenue streams and successful product commercialization. The acceleration of cost-cutting measures offers a glimpse of the company’s strategy to adapt to the changing landscape, but with significant cash outflows expected and disappointing clinical results, the path forward appears fraught with uncertainty.