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Topline
Battered by a steep broad-market selloff this week, Moderna shares fell for a sixth-straight day Friday as experts questioned whether Covid-19 vaccine sales alone will help justify the firm’s meteoric valuation, intensifying a crash that’s wiped out more than 60% of the value in one of last year’s top stocks and turned it into this year’s worst performer.
Moderna was last year’s third best-performing stock in the S&P—but it’s now this year’s worst.
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Key Facts
Moderna stock fell 5% in early trading Friday to an eight-month low of $160, pushing shares down more than 20% over the past week amid growing research suggesting Moderna’s Covid-19 booster, while very effective against previous strains, has been less effective against the rapidly spreading omicron variant.
Speaking to Yahoo! Finance on Thursday, Jefferies analyst Michael Yee said the “overly high expectations” set last year, as Moderna’s Covid-19 vaccine became widely available to the public, will “lead to challenges… as people digest” what’s next for the firm beyond Covid vaccines.
Yee said the recent stock drawback has helped put Moderna’s valuation in line with other biotechnology competitors, but he warned analysts increasingly expect Covid vaccine sales—currently Moderna’s sole revenue source—will fall over the next few years as the pandemic becomes endemic and competition heats up among treatment and prevention options.
Moderna’s stock plunge has pulled prices down so much that Bank of America analyst Geoff Meacham told investors in a Friday note that its valuation is now “back to earth” after its meteoric rise during the pandemic.
Meacham said he’s now focused on the company’s pipeline beyond Covid (Moderna is also developing a flu vaccine), and pointed to the firm’s massive $17 billion in cash as a source of “strategic” opportunity.
In a Friday note, UBS analyst Eliana Merle was more optimistic about Moderna’s prospects, calling its mRNA technology a disruptive force in the $35 billion annual vaccine market and saying its success with Covid-19 suggests a high likelihood of success for other vaccine targets.
Surprising Fact
Shares of Moderna have plunged 67% from an all-time closing high of $484 on August 9, wiping out about $133 billion from the firm’s market capitalization, which now stands at roughly $65 billion.
Tangent
Though it skyrocketed 143% to land the S&P 500’s third-best gain in 2021, Moderna stock has plummeted 35% this year—even worse than Netflix, which is down 32% after a steep 20% plunge Friday following a disappointing earnings report. To compare, Devon Energy and Marathon Oil, last year’s top and second-best performing stocks in the S&P, have climbed 7% and 11% this year, respectively.
Big Number
$5.3 billion. That’s how much Moderna CEO Stéphane Bancel, who joined the firm in 2011, is worth Friday, according to Forbes. The French native owns a roughly 8% stake in Moderna and was at one point worth more than $12 billion.
Key Background
Covid-19 vaccines have proven to be a massive boon for businesses heading up their development, but Moderna shares have struggled in recent months as critics increasingly question whether or not sales of Covid-19 vaccines alone will prove a viable revenue stream in years to come. In November, the company reported third-quarter sales and earnings that failed to meet analysts’ expectations, with revenue falling short of $5 billion despite average analyst projections calling for $6.2 billion. In addition to lower sales projections, supply chain constraints and the development of antiviral Covid-19 treatments have also dented investor sentiment—and triggered Moderna stock sell-offs.
What To Watch For
Moderna is expected to report fourth-quarter earnings by the end of February.
Further Reading
Moderna Crash Wipes Out Another $24 Billion After Supply-Chain Issues Dent Covid Vaccine Sales (Forbes)
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