Once upon a time in a land very close by, the stocks of COVID-19 vaccine makers were sizzling-hot. Those days seem like a fairy tale now, though.

Two of those vaccine stocks that were highfliers in the past have lost much of their luster. Moderna (MRNA -0.14%) and Novavax (NVAX 1.05%) are no longer big winners for investors. However, both stocks could have catalysts on the way.

Which is the better pick to buy right 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

Let's first address the uncertainties for Moderna. No one knows how sustainable the demand for the company's COVID-19 vaccines will be. There are questions about the high number of side effects of its experimental influenza vaccine. It's possible that the company's sales could decline quite a bit before any of its pipeline candidates can win approval.

But the story for Moderna isn't all bleak. The vaccine maker recently reported impressive first-quarter results. One number in that Q1 update could especially be a game changer -- Moderna's cash stockpile of $19.3 billion.

Moderna won't have any problems whatsoever funding its growing pipeline. It could also easily afford to make some strategic acquisitions or licensing deals to build up the pipeline even further.

Speaking of that pipeline, Moderna has 29 programs in clinical development plus another 17 in preclinical testing. The company's success with its messenger RNA (mRNA) COVID-19 vaccine bodes well for the chances for these pipeline candidates.

Moderna could continue to generate billions of dollars in annual sales with COVID-19 boosters. It also has a couple of promising late-stage vaccine candidates targeting cytomegalovirus (CMV) and respiratory syncytial virus (RSV).

The biotech's shares trade at less than 4.9 times expected earnings. This low valuation is primarily due to those uncertainties mentioned earlier. However, Wall Street remains very bullish about Moderna, with a consensus 12-month price target reflecting an upside potential of more than 60%.

The case for Novavax

Some of those question marks for Moderna also apply to Novavax. But Novavax faces even more uncertainty than Moderna does, especially considering that its COVID-19 vaccine hasn't won U.S. authorization yet.

That could soon change, though. The Food and Drug Administration (FDA) has scheduled an advisory committee meeting for June 7 to review Novavax's Emergency Use Authorization (EUA) filing for NVX-CoV2373. The company might be only a few weeks away from a significant catalyst.

There's no guarantee that the FDA will grant EUA for NVX-CoV2373. However, the chances appear to be pretty good, considering that Novavax has won authorizations or approvals in multiple countries across the world.

To be sure, Novavax is a laggard in the vaccine market in comparison to Moderna. One thing could make the company a vaccine leader, though: Novavax is ahead of its rivals in developing a combination COVID/flu vaccine.

The company has already reported positive initial results from a phase 1/2 study evaluating its combo COVID/flu vaccine candidate. Novavax expects to advance the program into the phase 2 portion of the study by the end of this year.

Cheap doesn't even begin to describe Novavax stock: Its shares currently trade at less than 1.4 times expected earnings. That valuation metric doesn't factor in Novavax's hefty cash position of $1.6 billion.

Better buy?

Investing is all about trading off risk for potential rewards. Both of these vaccine stocks have significant risks, but also the potential to generate big returns.

I think that Novavax's risk-reward proposition looks more appealing over the near term. A positive FDA decision for NVX-CoV2373 could help turn things around for the stock. Further success with its experimental combo COVID/flu vaccine could set up Novavax for sustained revenue for years to come.

Over the longer term, Moderna could very well be the bigger winner; the company's mRNA pipeline could deliver multiple blockbusters. For now, though, my view is that Novavax is the better buy.