Why Moderna Stock Just Crashed 21%

Moderna's (NASDAQ: MRNA) sales are slowing down, and Moderna stock is going down -- a lot.

The coronavirus vaccine maker's shares plunged 21.2% through 10:20 a.m. ET Monday after it updated investors on its 2024 performance and released new guidance for 2025.

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Moderna in 2024...and 2025

Moderna estimates it ended 2024 with somewhere between $3 billion and $3.1 billion in product sales as it shifted its business toward treating COVID-19 as an "endemic" illness rather than a novel and spreading pandemic. CEO Stéphane Bancel said Moderna has cut its "cash operating cost by over 25 percent compared to 2023" and plans to make further cost cuts of $1 billion in 2025 and $500 million more in 2026, which should boost profits.

That's the good news.

The bad news is that as Moderna heads into the new year, it foresees continued sales declines in its vaccines business. 2025 sales estimates range from only $1.5 billion to $2.5 billion, implying at least a 17% decline in sales this year and potentially a 52% crash. In this context, cutting $1 billion in costs may be the very least Moderna needs to do just to tread water on profits.

Is Moderna stock a sell?

Moderna's guidance took Wall Street by surprise, as analysts had been forecasting 2025 sales in the neighborhood of $2.9 billion. Even in the most optimistic scenario, Moderna will now miss that number by at least 14%. At the midpoint of management's guidance, Moderna will fall 31% short of Wall Street's goal.

In summary, Moderna's business thrived as it helped combat the pandemic, turning the company suddenly profitable in both 2021 and 2022. Now that the pandemic is over, though -- or, as Moderna says, the virus has become "endemic" -- the company has a long, hard road ahead of it.

Most analysts polled by S&P Global Market Intelligence don't see Moderna turning profitable again until 2029 at the earliest. If today's guidance wasn't enough to scare you away from Moderna stock, maybe those forecasts are.

Should you invest $1,000 in Moderna right now?

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Rich Smith has no position in any of the stocks mentioned. The Motley Fool recommends Moderna. The Motley Fool has a disclosure policy.