Some investors have made fortunes since early 2020 by investing in COVID-19 vaccine leaders. Moderna (MRNA 3.01%) has delivered a return of more than 1,500% since the beginning of last year. Novavax (NVAX 3.93%) has been an even bigger winner, with its shares skyrocketing by almost 4,000%.

Which of these vaccine stocks is the better pick now? Here's how Moderna and Novavax stack up against each other.

A healthcare professional giving a shot to a person.

Image source: Getty Images.

The case for Moderna

Moderna expects to generate sales of around $20 billion with its COVID-19 vaccine mRNA-1273 this year. The company announced in conjunction with its second-quarter update in August that it already had deals in place that would rake in $12 billion in sales in 2022. Those agreements included options for up to $8 billion in additional purchases. Since then, Moderna has finalized additional supply deals.

The company's success with its COVID-19 vaccine is filling its coffers. It had a cash stockpile of more than $12 billion as of June 30. Management is likely to put much of that money to use in bolstering its pipeline.

But that pipeline already looks promising. Moderna is developing variant-specific COVID-19 vaccines that could eventually take the baton from mRNA-1273. It plans to advance a messenger RNA (mRNA) cytomegalovirus (CMV) vaccine into phase 3 clinical trials this year. Management thinks the CMV vaccine could achieve peak annual sales of between $2 billion and $5 billion if approved.

Moderna's early-stage pipeline also includes several other vaccines targeting viruses such as influenza, respiratory syncytial virus, and Zika. In addition, the biotech hopes to harness the power of mRNA therapies and vaccines in treating cancer, with four oncology programs in phase 1 or phase 2 studies.  

To be sure, Moderna's fortunes for now rely primarily on its COVID-19 vaccine program. However, assuming those sales remain strong for the next several years, that will give the company time for some of its other pipeline candidates to advance. Over the long term, Moderna's mRNA technology could be used to target a wide range of diseases. 

The case for Novavax

Novavax hasn't secured any authorizations or approvals yet for its COVID-19 vaccine, NVX-CoV2373. However, that's actually a good reason to seriously consider buying the stock. Novavax's biggest catalysts could be right around the corner.

The company has already reported positive results from phase 3 studies of NVX-CoV2373. Novavax has delayed its timeline for filing for authorizations in several countries multiple times because it's still resolving some manufacturing issues.

When those authorizations are in hand, though, Novavax is set to make a boatload of money. The biotech has several large supply deals in place, including an agreement to supply up to 200 million doses of NVX-CoV2373 to the European Union.

Novavax is also awaiting an Emergency Use Listing (EUL) for NVX-Cov2373 from the World Health Organization. Once it gets that, the company and its partner, Serum Institute of India, will be able to move forward with supplying the vaccine to countries participating in the COVID-19 Vaccines Global Access Facility, better known as COVAX.

Over the longer term, Novavax could even beat Moderna and Pfizer in the COVID-19 vaccine market. The company is leading the way in developing a combination flu/COVID-19 vaccine. 

Better vaccine stock?

There's one thing that I believe is critical in choosing between these two vaccine stocks: valuation. And by that metric, Novavax is the clear winner.

Moderna's market cap stands close to $130 billion -- roughly 6.5 times its expected sales. By comparison, Novavax's market cap is less than $12.5 billion -- only 2.2 times its expected 2022 sales.

My view is that Novavax's near-term catalysts and more attractive valuation make it the better vaccine stock to buy right now. However, I think that Moderna's mRNA technology could give it a major advantage over the long term.