On November 30th, exactly 3 years ago, Moderna’s (MRNA) stock was priced at $352.43, but after losing 87.69% of its value, MRNA stock is priced at $43.50. This downturn trajectory tells much of the story of the biotech company in recent years; the COVID-19 days of glory and the celebrations of the groundbreaking MRNA vaccines are truly over, and instead, a concerning reality has emerged: one that consists of fierce competition from other pharma companies developing and delivering Covid vaccines; concerns over the side effects of COVID-19 vaccines; leadership changes, and, of course, the rise of vaccine skepticism. That rise is highlighted by RF Kennedy’s appointment as the Secretary of Health, which marks a peak in this movement.
Don't Miss our Black Friday Offers:
- Unlock your investing potential with TipRanks Premium - Now At 40% OFF!
- Make smarter investments with weekly expert stock picks from the Smart Investor Newsletter
We only have to be reminded of Joe Rogan’s joke, “Before Corona, I was a big vaccine fan. After Corona, I don’t even believe we went to the moon.”
It has been a tough three years for MRNA. If you wish to read more about its struggles, you can read the thoughts of James Fox, our writer at Tipranks, who has written extensively on the Moderna. Now, let’s examine three talking points on Moderna’s challenges, financials and its long-term potential:
- Regulatory and Policy Challenges: Let’s start with the nomination of vaccine skeptic Robert F. Kennedy Jr. as Secretary of Health and Human Services. This poses a huge threat to Moderna’s prospects. Kennedy’s position on vaccines could lead to tightened regulatory changes and growing vaccine hesitancy, affecting sales revenue. Recent studies show vaccine skepticism is higher among certain demographics, with 34% of Republicans and 22% of Independents expressing hesitancy. Also, a survey in 2021 found that 25% of adults between the ages 18 and 39 were reluctant to receive Covid vaccines. The company’s ability to deal with these external challenges will be key to its long-term success.
- Financial Performance and Market Position: Moderna’s stock reflects the company’s current state. It has declined 71% over the last six months, highlighting investors’ concerns over its financial stability. The company suffers from high cash burn rates and has recently revised its financial guidance, delaying profitability by two years and cutting R&D budgets. Its lower-than-expected vaccine sales and increased competition have contributed to this. However, Moderna’s strong cash reserves and lack of considerable debt make life a little easier.
- Technological Advancements and Revenue Potential: On a positive note, Moderna continues to secure funding for its new vaccine developments. In July, the company received $176 million to work on a bird flu vaccine, causing an immediate stock surge to over $160, highlighting how quickly things can change. The company’s ability to leverage its mRNA technology for infectious diseases remains a strong point, offering hope for future revenue streams.
What Is the Price Target for MRNA?
Looking at the consensus breakdown, MRNA’s Hold (i.e., Neutral) consensus rating is based on a mix of 6 Buys, 11 Holds, and 3 Sells. The bulls, though, are having a big impact on the average price target; at $75.53, the figure implies shares will surge 74% over the next 12 months.
Final Word
Just three years ago, Moderna was the world’s most successful company and was considered by many -along with Pfizer (PFE) – the world’s savior. Those days are long gone and were replaced by increased competition, cash burn, and vaccine skeptics. As mentioned above, things can change quickly, but Moderna has to be resilient and find steadiness within its board of directors if it wishes to further leverage its groundbreaking technology.
