Moderna (MRNA) stock is making a turnaround after the Food and Drug Administration approved its second-ever product, a vaccine to prevent respiratory syncytial virus in older adults.
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The vaccine, dubbed mResvia, was developed to protect people age 60 and older from RSV. Usually, RSV causes coldlike symptoms in most people. But in newborns and older adults it can be serious or even deadly. Moderna will rival Pfizer (PFE) and GSK (GSK), which launched their shots last year.
Also, in June, Moderna and Merck (MRK) announced three-year test results of their cancer vaccine combined with Keytruda. After a median of 34.9 months, the regimen reduced the risk of cancer recurrence by 49% and the risk of metastases or death by 62% compared to Keytruda alone.
The companies are also testing the combo in patients with melanoma, non-small cell lung cancer, kidney cancer, bladder cancer and a form of skin cancer called cutaneous squamous cell carcinoma.
The also FDA selected Moderna's potential treatment for methylmalonic acidemia for its pilot program, Support of Clinical Trials Advancing Rare Disease Therapeutics, or START. The program aims to advance treatments for rare diseases. Methylmalonic acidemia is a rare, genetic disease that prevents the body from breaking down proteins and fats.
Further, Moderna confirmed it's in discussions with the U.S. government to move forward with its bird flu vaccine. Pfizer has also said it can jump in with a new pandemic influenza vaccine.
Moderna stock has risen almost 56% this year, as of the close on Thursday. So, is Moderna stock now a buy?
A Fundamental Look At Moderna Stock
Moderna beat first-quarter sales expectations and reported narrower-than-expected losses. But sales plummeted nearly 91% year over year and losses reversed from a year-ago gain of 19 cents a share. Neither metric lines up with investing advice, which suggests savvy investors seek stocks with recent earnings and sales growth of 20% to 25%.
But Moderna expects the lion's share of its sales to come in the second half of 2024. That lines up with the seasonal market for Covid, flu and RSV. It's also testing a combination vaccine to prevent Covid and the flu in one shot. The results of that study are expected before year end.
For the second quarter, Moderna stock analysts project losses of $3.36 per share and $131 million in sales. That's expected to be the lightest sales quarter for Moderna since launching its Covid shot. Sales are expected to accelerate in a big way in the third quarter, with a projected $1.49 billion, and again in the fourth quarter with expectations for $2.36 billion.
But MRNA stock has a middling IBD Digital Composite Rating of 57 out of a best-possible 99. The Composite Rating is a measure of a stock's key fundamental and technical measures. So, MRNA stock ranks narrowly inside the top half of all stocks, regardless the industry group, on that measurement.
What Do Annual Metrics Say?
Moderna stock went public at 23 in late 2018. In 2020, shares rocketed more than 434%. The gain was less bullish in 2021, with shares rising 143%. In 2022 and 2023, shares toppled a respective 29% and nearly 45%.
Sales tumbled 64% in 2023, coming in at $6.85 billion. That beat expectations for $6.47 billion, according to FactSet. But Moderna turned in per-share losses of $12.33, reversing from a year-earlier gain of $20.12 a share.
The company noted that it achieved 48% market share for Covid vaccines in the U.S. during the fall of 2023, up from 37% in the year-earlier period. Moderna is rivaling vaccine makers Pfizer and Novavax (NVAX). Still, the market for Covid boosters is uncertain, and revenue from companies that make Covid products continues to decline.
The company calls for $4 billion in sales in 2024 and for a return to growth in 2025. Analysts expect Moderna to bring in $4.14 billion in sales this year. Losses are also expected to narrow to $7.07 a share. In 2027, Moderna could once again turn a profit.
By 2028, the company expects to bring in an additional $10 billion to $15 billion in sales of products for oncology, rare and latent diseases. In 2027, the company expects respiratory vaccines to generate $8 billion to $15 billion in sales.
Moderna Stock: Technical Analysis
Moderna stock broke out of a cup-with-handle base with a buy point at 115.89 on May 2, the day the company reported its first-quarter earnings.
Shares have rebounded from the RSV vaccine fallout and now top both the buy zone and the profit-taking zone. Moderna stock is also above its 50-day and 200-day moving averages, MarketSurge shows.
MRNA stock has a Relative Strength Rating of 96. The RS Rating is a 1-99 measure of a stock's 12-month performance. This means Moderna stock outranks 96% of all stocks on that metric.
But MRNA stock has a poor EPS Rating of 5, reflecting recent losses.
Keep tabs on IBD Digital for more on stock ratings.
What's After Covid Shots?
Investors are closely watching whether the U.S. government will tap Moderna and Pfizer to further their new pandemic influenza vaccines amid growing concerns about the H5 bird flu. So far, three people in the U.S. have been sickened by the bird flu following contact with infected dairy cows.
Moderna says it has finished dosing healthy participants in a Phase 1 and Phase 2 study of its experimental vaccine, mRNA-1018. The company says it will have the results of that study soon. Meanwhile, Pfizer began testing its pandemic vaccine last year.
The bespoke cancer vaccine is also gaining attention. The shot prompts an immune response against a patient's own tumor cells. Almost three-quarters of melanoma patients who received the cancer vaccine plus Keytruda, 74.8%, survived for 2.5 years without their cancer recurring. That compares to 55.6% for Keytruda alone.
Earlier in the year, one analyst called results from the cancer vaccine study "transformational." And Moderna stock surged more than 9% on Dec. 19, the day it released the news.
Moderna also recently gained FDA approval for its second product, the RSV shot.In older adults, the shot proved almost 84% effective against mild disease and more than 82% effective against severe RSV. The company says it has already submitted applications for approval globally.
So, Is Moderna Stock A Buy Right Now?
No, Moderna stock is not a buy. Shares have broken out, but are now above their buy and profit-taking zones. If Moderna stock returns to that 5% zone, savvy investors could consider adding to their position. But it's more likely Moderna shares will form a new base.
But, keep in mind, sales are still falling and the company continues reporting losses. And analysts don't expect a return to massive pandemic-era growth until 2025. That year, they expect strong sales of vaccines for Covid, RSV and the flu.
To find the best stocks to buy and watch, check outIBD Stock Lists. Make sure to also keep tabs onstocks to buy or sell.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
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