Moderna (MRNA -5.35%) delivered an enormous win for investors during the early days of the pandemic thanks to its leadership in the coronavirus vaccine market. But when demand for the vaccine, at the time the biotech's only commercialized product, declined, so did the company's earnings. And the stock followed, spending a few years in the doldrums.
But in recent times, Moderna has made a turnaround. The company's cost realignment plan is bearing fruit, and pipeline candidates are progressing toward the finish line. Investors were particularly impressed with data from a late-stage trial of Moderna's personalized cancer vaccine. Meanwhile, Moderna has also won approval for new products, the most recent being an mRNA flu vaccine, launching for the current season. The biotech even predicts that revenue this year may advance as much as 10%.
Considering all of this, my prediction is that Moderna stock will soar 100% by 2030. Let's consider the case.
Image source: Getty Images.
Moderna has launched five products
So, first, let's take a look at Moderna's current product situation and the prospects ahead. Right now, the company sells four products in the U.S.: two coronavirus vaccines, a respiratory syncytial virus vaccine, and a flu vaccine. And in Europe, it won approval for a combined coronavirus and flu vaccine. These products are the revenue engine at the moment, as Moderna fuels research across its pipeline, with a focus on oncology and rare diseases.
In the recent earnings report, Moderna reiterated its forecast for as much as 10% revenue growth in the current year thanks to expansion of its updated coronavirus vaccine. Considering last year's revenue of $1.9 billion, that would bring 2026 revenue to about $2 billion. And the biotech expects to deliver a reduction in GAAP operating expenses.
But what truly has captured the attention of investors is Moderna's progress in its oncology program. The company is studying mRNA-4157 in collaboration with Merck across nine phase 2 and phase 3 trials -- these include multiple tumor types, from melanoma to bladder cancer. Moderna recently announced positive data from a phase 3 trial of its product in combination with Merck's Keytruda: The combo met its goals in recurrence-free survival and survival without the cancer spreading to distant organs in melanoma patients who had previously undergone surgery.
This potential product is one that could be important for Moderna and for patients due to its ability to tackle various tumor types and the fact that it's personalized for each patient. That said, the manufacturing and roll-out of a personalized vaccine is likely to be slower and more challenging than the processes for a one-size-fits-all product. It's key to keep that in mind as this candidate advances and even potentially reaches commercialization. So revenue growth may take time.
Investors have piled into Moderna stock this year
The early days of Moderna's turnaround, as the company expanded beyond the coronavirus vaccine, didn't immediately win over investors, as I mentioned above. But this year, amid the company's research successes, investors jumped on board, helping the stock rise a mind-boggling 500%.
NASDAQ: MRNA
Key Data Points
So, why do I think the stock will rise only 100% from here through 2030? First, it's important to keep in mind that Moderna had fallen to very low levels in recent years, making it "easier" to post an enormous gain on good news.
Second, I'm basing my prediction on what we know so far about revenue growth. The company hasn't offered forecasts for 2030 or revenue projections for a specific potential product, such as the melanoma therapeutic vaccine.
We could imagine that if Moderna increases revenue by 10% this year, and then by 10% each year through 2029, annual revenue may approach $3 billion. Today, Moderna's forward price-to-sales ratio has climbed to 37. If the stock rises 100%, that would bring it to a price-to-sales ratio of 52, which is higher than today's level. So my prediction actually isn't as modest as it initially appears.
And I'm willing to go out on a limb and say that Moderna's annual revenue may be higher than that $3 billion level if its pipeline programs produce additional products. Also, any positive pipeline data generally stirs up excitement about this company's potential and pushes investors to buy as they look ahead to long-term prospects -- without worrying too much about current valuation. And that's why I predict that the stock could climb at least 100% by 2030.
