Moderna (MRNA) stock surged — and then tumbled — in mid-April after the company unveiled early-stage test results for its Merck (MRK)-partnered cancer vaccine.
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The companies tested a combination of the cancer vaccine and Merck’s Keytruda in patients with head and neck cancer. Overall, 27.3% responded to the treatment. A total of 63.6% of patients had their disease under control, Moderna said in its presentation.
Moderna stock briefly broke out, topping a buy point at 114.25 out of a cup-with-handle base, according to MarketSurge.com. Shares later fell as much as 7% below that entry on April 10, triggering a sell rule.
Moderna and Merck recently said they will test their cancer vaccine in addition to Keytruda in patients with bladder and kidney cancer, RBC Capital Markets analyst Luca Issi said in a report. Patients will receive Keytruda or Keytruda plus the vaccine after bladder or kidney removal.
Bladder cancer and renal cell carcinoma are big opportunities, Issi said, with between 82,000 to 83,000 new diagnoses each year for both cancer types. He also noted Moderna and Merck began testing their combination in squamous cell carcinoma, a form of non-melanoma skin cancer.
The companies have already reported promising data from their study in melanoma, and are also testing the regimen in lung cancer.
In other news, Moderna recent said its next-generation Covid shot outperformed its first vaccine, called Spikevax, in generating antibodies capable of handling the BA.4 and BA.5 subvariants of omicron. The benefit was “most acutely” seen in study participants age 65 and older.
The company has guided to $4 billion in 2024 sales. Moderna expects to return to growth in 2025 and to break even in 2026. On Feb. 22, the day of its December-quarter earnings release, Moderna stock surged above its 50-day line.
Now, Moderna is looking ahead to its respiratory syncytial virus vaccine. The company expects to gain Food and Drug Administration approval in the first half of the year, vs. earlier guidance for April. Worries about waning effectiveness, though, have hammered Moderna stock. If approved, the vaccine will launch a year after Pfizer‘s (PFE) and GSK‘s (GSK) shots.
So, all in all, is Moderna stock a buy or a sell today?
A Fundamental Look At Moderna Stock
Moderna’s fourth-quarter sales and earnings beat expectations, though tumbled a respective 45% and 85% year over year. Sales were $2.8 billion, while earnings came in at 55 cents per share. Analysts, though, had expected Moderna to report losses in the fourth quarter.
Moderna stock analysts project a per-share loss of $3.45 for the first quarter, flipping from a year-ago gain of 19 cents. Sales are expected to fall 87% to $242 million.
Moderna stock has a poor IBD Digital Composite Rating of 20 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 in the bottom fifth of all stocks, regardless 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 $4.21 billion in sales this year. Losses are also expected to narrow to $7.19 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 briefly broke out of a cup-with-handle base on April 9. But shares fell below their entry at the close and, on April 10, sank into sell-zone territory. Investors are encouraged to cut their losses when a stock falls 7% to 8% below its buy point.
MRNA stock has a Relative Strength Rating of 23. The RS Rating is a 1-99 measure of a stock’s 12-month performance. This means Moderna stock ranks in the bottom quarter 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 paying close attention to the bespoke cancer vaccine in partnership with Merck. The shot prompts an immune response against a patient’s own tumor cells.
The cancer vaccine reduced the likelihood cancer would return or patients would die by 49% after about three years. A Phase 3 study is already underway with the initial results expected later this decade. But at least one analyst says Moderna could seek a speedy approval in 2025. Further, the companies are running a late-stage study in non-small cell lung cancer patients.
One analyst called the results “transformational.” And Moderna stock surged more than 9% on Dec. 19, the day it released the news.
Beyond cancer, Moderna also has a breakthrough designation for its 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.
Moderna also unveiled the results of a potential treatment for propionic acidemia, a rare, genetic condition in which the body can’t break down certain proteins and fats. After a year of treatment, most patients had none or a lower rate of metabolic decompensation associated with the disease. Metabolic decompensation is a series of symptoms that includes vomiting and food refusal.
So, Is Moderna Stock A Buy Or A Sell Right Now?
No, Moderna stock isn’t a buy right now. Shares remain above their key moving averages, but couldn’t hold onto their breakout.
The company’s once eye-popping sales and profits are expected to decline this year. 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 out IBD Stock Lists. Make sure to also keep tabs on stocks to buy or sell.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
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