There's no way to sugarcoat it -- 2022 has been a rough time for the market. It seems that the decline has hit all sectors and all kinds of stocks. One sector that has been hit particularly hard is healthcare, down more than 11% year to date. As painful as that can be for shareholders of the affected companies, this is also a great time to buy shares of strong businesses that have been caught up in a larger market sell-off.

Moderna (MRNA 0.99%) and Repligen (RGEN 0.10%) are two companies that have seen their stock prices decrease even as they posted positive business results. There are compelling reasons to buy these companies now and hold them for the long haul.

Medical professional giving patient a shot.

Image source: Getty Images.

Moderna

While Moderna may have been known to some investors prior to the pandemic, the biotech company has become a household name as it was able to bring to market its highly successful vaccine for COVID-19. Prior to this, Moderna had nothing commercially available, so the sales growth over the past year-plus is from a base of zero revenue. 

That said, Moderna has proven the efficacy of its mRNA technology and has 46 programs in development, 29 of which are already in clinical trials. While not all these drugs will be successful, it's reasonable to expect that Moderna will be able to bring to market additional vaccines to supplement its sales and eventually replace its COVID-19-related revenue. In fact, when Moderna recently reported its first-quarter 2022 earnings, the company stated it expects to have four programs in phase 3 trials in the second quarter of this year. 

Moderna's financial results were encouraging as well. Revenue for the quarter was $6.1 billion and net income was $3.7 billion. These results both represented year-over-year growth of over 200%, but it's important to remember that the vaccines were still new one year ago, so these growth numbers are coming from a small base. In fact, Q1 revenue declined sequentially for the first time since the COVID-19 vaccines were approved, so this is something investors should keep an eye on until there's another product for sale.

Despite the slowing revenue growth, management expects the second half of 2022 will see slightly higher sales as it still has approximately $21 billion in advanced purchase agreements yet to be realized. Moderna also ended Q1 with $19.3 billion in cash, cash equivalents, and investments on the balance sheet, ensuring it has the capital to make additional investments in its product pipeline and protecting it against any potential reduction in sales. 

Moderna currently has a price-to-sales (P/S) ratio of 2.7, near its all-time low. Even with the inherent uncertainty around future products, I think there's enough potential ahead of this company to make it a compelling stock for investors to consider. 

Repligen

For investors looking for exposure in the healthcare space that's not tied to the success of any one business, Repligen may fit the bill. In the process of developing and testing new products, companies like Moderna rely on materials provided by companies like Repligen. Specifically, Repligen focuses on filtration, chromatography, process analytics, and proteins, and most of its revenue comes from the consumable products that healthcare companies use in their labs.

Repligen plays an important role in the biotech space by providing these materials needed by other companies. In Q1 of 2022, revenue increased 45% year over year. And much like other companies that have had a role in fighting the pandemic, some of this revenue growth was COVID-19-related. The good news is that Repligen's core (non-COVID-19) revenue still accounts for more than 70% of overall sales, lessening the effect of revenue growth as COVID-19-related sales decrease.

The company also improved its margins and profitability. Gross margin for Q1 improved to 60.1%, up from 58.2% in the year-ago quarter, and net income grew 59% to $47 million. 

One piece of bad news from the Q1 earnings report was a reduction in its full-year outlook for 2022. Repligen lowered its guidance for revenue, operating income, and net income. However, even with this revision, full-year revenue, operating income, and net income are projected to grow 17%, 10%, and 11%, respectively.

Guidance reductions are never good to see, but it's important to understand the company is still projecting growth. Additionally, full-year 2022 results are being compared to a particularly strong 2021 when revenue increased due to the effect of the pandemic. Moreover, Repligen's revenue is not tied to the success of any one company, making it a less risky investment in the healthcare space.

Repligen's P/S ratio is currently 11.8, meaning the stock trades for around the same multiple as it did in 2019. The company estimates its market opportunity in the bioprocessing field to be approximately $8.1 billion. For investors who believe Repligen can be a leader in this space, the current valuation and potential market size make it a great stock to buy and hold for the long haul.