Will Moderna Stock Drop to $25? 1 Wall Street Analyst Thinks So.

In the dark days of the coronavirus pandemic, Moderna (NASDAQ: MRNA) was a ray of light in more ways than one. The healthcare company's innovative Spikevax was one of the go-to vaccines that sped to market, not only protecting hundreds of millions of people from COVID-19, but also producing gobs of revenue and healthy profits.

That was a hard act to follow, and ever since the public health crisis ended, Moderna's stock has languished. One Wall Street analyst recently cut her price target on the stock, reiterating her sell recommendation at the same time.

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The company isn't so healthy these days

Wolfe Research's Alexandria Hammond now feels Moderna will be trading at around $25 per share a year from now, well down from her previous price target of $35. That new level is 30% below the pharmaceutical stock's closing price Tuesday. Hammond kept her underperform (read: sell) rating on the stock intact.

According to reports, Hammond's latest take on Moderna was based on issues such as cost-management struggles, and legal headaches due to a long-running patent infringement lawsuit brought against it by Roivant Sciences and its subsidiary Arbutus Biopharma.

More recently, the company said the Food and Drug Administration had placed a hold on its late-stage trial of a norovirus vaccine candidate. This occurred after a single participant in its study developed Guillain-Barré syndrome, an autoimmune disorder that affects the muscles.

Let's see how the recovery goes

Investors should always be alert to good contrarian plays. It can pay to snap up shares of companies when they're being unfairly pushed down by the market.

However, I'm not sure that's the case here. Moderna performed spectacularly in the fight against the coronavirus menace, but it badly needs a new win. There is currently too much uncertainty around the company's outlook, and it remains to be seen how it'll be able to cope with its challenges. It seems like the stock is a wait-and-see at best now.

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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool recommends Moderna and Roivant Sciences. The Motley Fool has a disclosure policy.