Moderna Inc. (MRNA, Financial) shares experienced a significant decline today, with the stock dropping by 21.86%. This decline was largely in response to the company's recent update on its future performance expectations.
For 2024, Moderna anticipates product sales between $3 billion and $3.1 billion as the company adapts to COVID-19 transitioning into an endemic phase. To manage expenses, CEO Stéphane Bancel announced a cash operating cost reduction exceeding 25% from 2023 levels, with a strategic plan to cut costs by another $1 billion in 2025 and $500 million in 2026.
Looking ahead to 2025, Moderna forecasts a continued downturn in vaccine sales, projecting revenues between $1.5 billion and $2.5 billion, a decrease that could range from 17% to as much as 52% compared to current figures. These cost reductions are deemed crucial to maintain profitability amid declining sales.
Wall Street analysts were caught off guard by Moderna's guidance, as they had forecasted 2025 sales around $2.9 billion. The company's most optimistic scenario is still 14% lower than analyst expectations, with the midpoint of Moderna's guidance falling short by 31%.
From a valuation standpoint, Moderna's stock is currently trading at $33.015, with a market capitalization of approximately $12.7 billion. The company presents a mixed financial outlook, indicated by a Piotroski F-Score of 3 and a Sloan Ratio of -31.49%, which points to potential quality of earnings issues. However, the Altman Z-Score of 3.91 suggests strong financial stability. Despite the challenges, the firm is not deemed likely to manipulate earnings, as indicated by the Beneish M-Score of -2.41.
Moderna's current GF Value is estimated at 31.18, suggesting the stock is GF Value fairly valued. Investors should consider the company's risky stance in the Biotechnology sector, given the drop in projected sales and operational performance.
Overall, while Moderna has a strong position in mRNA technology with 40 development candidates, the path ahead necessitates keen strategic cost management to navigate the forecasted decrease in revenue effectively.
