Is Moderna a Bad-News Buy for 2025?

Moderna (NASDAQ: MRNA) was one of the hottest companies of early pandemic times, delivering a coronavirus vaccine to market in record time and quickly generating blockbuster revenue from it. This helped the stock to skyrocket, reaching a high of more than $480 at its peak in 2021.

Since then, though, Moderna has traveled along a rough path. Demand for the coronavirus vaccine has dropped significantly, and even the company's second approved product -- respiratory syncytial virus (RSV) vaccine mRESVIA -- hasn't delivered as much revenue as expected. All this has weighed on the stock, which has lost more than 90% since its peak.

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On top of this, at the JPMorgan Healthcare conference this week, Moderna lowered its 2025 revenue guidance, and announced more than $1 billion in cost cuts for this year and next. This follows initial spending reductions launched in 2023 to scale back the company's manufacturing infrastructure.

So, right now, after the stock fell 16% in one trading session on the news, is Moderna a bad-news buy for 2025? Let's find out.

Image source: Getty Images.

A disappointing vaccination season

So, let's consider the bad news first. Moderna has delivered lower levels of revenue than expected in recent times as demand for vaccination fell short of initial expectations. It also lost market share in COVID vaccination during the recent season as competition increased.

This problem may remain as other competitors enter the market or gain in strength -- for example, as of this year, vaccine giant Sanofi will co-commercialize Novavax's coronavirus vaccine, and its experience and infrastructure may help it take market share.

Moderna's mRESVIA also may face ongoing headwinds. In a recent letter to shareholders, Moderna chief executive Stéphane Bancel wrote, "We were also too optimistic about our ability to break into the market, given the headwinds from a midyear approval and launch." Moderna's mRESVIA joined the market after RSV vaccines from Pfizer and GSK already had established themselves.

At the healthcare conference, Moderna lowered expected 2025 revenue to the range of $1.5 billion to $2.5 billion -- down from a September forecast of $2.5 billion to $3.5 billion. And Moderna said it aims to reduce costs by $1 billion this year and by $500,000 next year.

Now, let's consider some good news. It starts with the cost cuts. Though these sorts of moves may not be associated with growth right away, it is positive that Moderna has taken steps to scale down its infrastructure and is keeping costs under control. This should help the company supercharge growth once other products reach commercialization.

Ten potential product approvals

And speaking of potential new products, in other positive news, Moderna aims to score 10 product approvals over the coming three years to spur revenue growth. These include a combination flu/coronavirus vaccine, a cytomegalovirus (CMV) vaccine, and a personalized cancer vaccine.

If Moderna reaches those goals, revenue growth could take off again. Even better, these potential products aren't linked to a special situation like a pandemic, so they may generate years of growth rather than a sharp increase in a short period of time. And this could result in positive stock performance.

Does all this make Moderna a bad-news buy for 2025? This depends on your comfort with risk. Moderna may reach its product approval and launch goals -- but this will take a few years. Meanwhile, the market could continue to sanction the biotech if sales remain lackluster in 2025.

Cautious investors may want to wait until the company's situation stabilizes before picking up the shares. Aggressive biotech investors focused on the long term may want to scoop up some shares now, though -- as it's impossible to time the market and get in at the very lowest point. And, if Moderna launches several new products over the next few years, revenue and the stock price eventually could soar.

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

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JPMorgan Chase is an advertising partner of Motley Fool Money. Adria Cimino has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends JPMorgan Chase and Pfizer. The Motley Fool recommends GSK and Moderna. The Motley Fool has a disclosure policy.