Moderna (NASDAQ:MRNA) has been one of the hottest healthcare stocks of the past year, soaring more than 400% and eclipsing the S&P 500's 55% gains over that time frame. The company's coronavirus vaccine, mRNA-1273, which the U.S. Food and Drug Administration (FDA) issued emergency use authorization (EUA) for in December 2020, is what has gotten investors so excited about the stock as it will generate billions in revenue for the company.

The stock hit an all-time high of $189.26 in early February. But since then, the FDA has issued another EUA for Johnson & Johnson's COVID-19 vaccine, while others, including those from Novavax and AstraZeneca, could also get the green light soon. Today, Moderna's stock is trading around $145, and many investors may be worried that it is too late to buy the stock -- are they right?

Man looking at stock charts and Buy and Sell arrows

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A look at the stock's valuation right now

To get a good idea of how pricey Moderna's stock is, it is important to consider its price-to-sales (P/S) ratio (since the company isn't profitable right now). There is a huge discrepancy in the company's trailing and forward P/S ratios.

That's because analysts are anticipating significant sales growth due to the company's COVID-19 vaccine. In 2020, Moderna generated $803.4 million in revenue, and it is projecting that in 2021 its vaccine sales will hit $18.4 billion. 

MRNA PS Ratio Chart
Data by YCharts.

A lot depends on which number you look at here. If you focus on the trailing P/S ratio, then Moderna looks incredibly expensive given that the average stock in the Health Care Select Sector SPDR Fund trades at a minuscule 1.7 times its revenue. Moderna would still be a more expensive buy at its forward multiple, but not by a whole lot, especially for a growth stock. However, that doesn't mean its shares are going to get a whole lot higher.

Why Moderna's stock may have peaked

The Dow Jones is at all-time highs and stocks are generally expensive right now -- the S&P 500 is at a price-to-earnings multiple of 34, which is the highest it has been since the financial crisis more than a decade ago. Moderna's stock has benefited from what has been a strong bull market even amid the pandemic.

And while there is reason to be optimistic that the company will have an exceptional year in 2021, if there is a market crash or the pandemic gets under control and there isn't a significant need for vaccines next year or even booster shots, then Moderna's valuation could come crashing down.

The company is working on a new vaccine, mRNA-1283, which will be a booster dose for people who are already vaccinated. With new variations of COVID-19 popping up around the world, there is a concern that recurring booster shots will be necessary for an indefinite period. But how much revenue mRNA-1283 may generate (assuming it obtains FDA approval) is unknown.

That is why in 2022 and beyond, the stock could become a much worse buy if it is not able to keep generating those strong sales numbers. Although Moderna has other products in its pipeline, the best one right now looks to be its cytomegalovirus vaccine, which is in phase 3, and its peak annual sales of $5 billion would still be well shy of mRNA-1273's possible sales this year. 

With life in the U.S. potentially getting back to normal as early as this fall, investors may not be nearly as bullish on COVID-19 stocks, including Moderna.

Is it too late to invest in Moderna?

An IPSOS poll released earlier this month found that consumer confidence has reached a new high (during the pandemic) as people are more optimistic about the future. A majority of them anticipate that once governments ease COVID-19 restrictions, the economy will recover quickly.

That strong sentiment is likely a key reason why Moderna's stock hasn't been all that popular of late. Unless there is renewed pessimism relating to the pandemic, it seems unlikely for shares of Moderna to reach new heights. But if there's one thing COVID-19 has taught the world, it is how quickly and unexpectedly things can change. The pandemic isn't over just yet, and it's possible Moderna's stock could rally again, but I certainly wouldn't expect it.

Without a drug in its pipeline to fill the gap once COVID-19 vaccines aren't needed anymore, it appears likely that the company's sales will drop back down after 2021, which makes Moderna look like a short-term investment rather than a stock that you can hang on to for many years. Until that outlook changes, investors are likely better off looking elsewhere to find some great buys.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.