We came across a bullish thesis on Moderna, Inc. (MRNA) on Substack by Natan. In this article, we will summarize the bulls’ thesis on MRNA. Moderna, Inc. (MRNA)’s share was trading at $42.05 as of Nov 26th. MRNA’s trailing P/E was 7.06 according to Yahoo Finance.
Photo by Ian Hutchinson on Unsplash
Moderna, a biotech leader renowned for its groundbreaking mRNA technology, has faced significant challenges in recent years, with its stock declining 92% from its peak and revenue dropping by 50% in 2024 to $3.0–$3.5 billion due to a sharp decline in COVID-19 vaccine demand. Despite these setbacks, Moderna’s transformative potential remains intact, underpinned by its extensive mRNA platform and an ambitious drug pipeline. Management has recalibrated expectations, extending its profitability timeline to 2028, reflecting a more measured approach amid a total addressable market (TAM) for COVID vaccines expected to stabilize at $6–$8 billion.
Unlike traditional pharmaceutical companies, Moderna operates as a tech-driven platform, leveraging its innovative mRNA technology to accelerate drug development, scale production, and achieve high margins. This approach has yielded exceptional results, with Moderna boasting a 6x higher clinical trial success rate than the industry average. The company’s vertically integrated model is a critical moat, supporting a robust pipeline of over 40 drug candidates across vaccines for respiratory and latent viruses, oncology, and rare diseases.
Revenue from COVID-19 vaccines has been instrumental in funding Moderna’s $4 billion annual R&D investments, enabling rapid pipeline expansion. By 2024, the company had advanced to 18 Phase 2 and seven Phase 3 trials, signaling strong momentum. Near-term catalysts include potential Phase 3 approval for the world’s first CMV vaccine and promising therapeutic cancer vaccines in partnership with Merck, which could redefine Moderna’s narrative as a pioneer in personalized medicine.
Moderna’s vision is further validated by insider confidence, with top executives maintaining significant equity stakes despite market turbulence. Moreover, the company’s investments in global manufacturing infrastructure position it well for future commercialization. Its estimated TAM of $50 billion across respiratory and latent virus vaccines alone highlights vast growth opportunities, not including oncology or rare disease treatments.
Valuing Moderna based on its long-term potential, a $15 billion revenue target by 2034—driven by moderate market shares across key areas—supports a fair valuation of $120 billion, reflecting a 23% CAGR from 2025 to 2034. This projection assumes a conservative 8x price-to-sales multiple, aligning with the efficiency of its mRNA platform.
While risks remain, including pipeline approval uncertainties, cash burn, and political headwinds, Moderna’s strategic focus, superior technology, and disciplined cost management provide a compelling risk/reward profile. At current levels near book value, the market appears to overlook its vast potential, making Moderna an appealing choice for long-term investors.
Moderna, Inc. (MRNA) is not on our list of the 31 Most Popular Stocks Among Hedge Funds. As per our database, 34 hedge fund portfolios held MRNA at the end of the third quarter which was 39 in the previous quarter. While we acknowledge the risk and potential of MRNA as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than MRNA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article was originally published at Insider Monkey.