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Biotechnology company Moderna (NASDAQ:MRNA) met Wall Street’s revenue expectations in Q4 CY2024, but sales fell by 65.6% year on year to $966 million. On the other hand, the company’s full-year revenue guidance of $2 billion at the midpoint came in 9.8% below analysts’ estimates. Its GAAP loss of $2.91 per share was 6.7% below analysts’ consensus estimates.

Is now the time to buy Moderna? Find out in our full research report.

Moderna (MRNA) Q4 CY2024 Highlights:

• Revenue: $966 million vs analyst estimates of $965.6 million (65.6% year-on-year decline, in line)

• EPS (GAAP): -$2.91 vs analyst expectations of -$2.73 (6.7% miss)

• Management’s revenue guidance for the upcoming financial year 2025 is $2 billion at the midpoint, missing analyst estimates by 9.8% and implying -38.2% growth (vs -46.2% in FY2024)

• Operating Margin: -129%, down from 0.2% in the same quarter last year

• Free Cash Flow Margin: 31.4%, up from 14.3% in the same quarter last year

• Market Capitalization: $11.75 billion

Company Overview

Founded in 2010 and widely known for its COVID-19 vaccine, Moderna (NASDAQ:MRNA) is a biotechnology company focused on developing messenger RNA (mRNA) therapeutics and vaccines.

Therapeutics

Over the next few years, therapeutic companies, which develop a wide variety of treatments for diseases and disorders, face strong tailwinds from advancements in precision medicine (including the use of AI to improve hit rates) and growing demand for treatments targeting rare diseases. However, headwinds such as rising scrutiny over drug pricing, regulatory unknowns, and competition from larger, more resourced pharmaceutical companies could weigh on growth.

Sales Growth

Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can have short-term success, but a top-tier one grows for years. Luckily, Moderna’s sales grew at an incredible 122% compounded annual growth rate over the last five years. Its growth beat the average healthcare company and shows its offerings resonate with customers.

We at StockStory place the most emphasis on long-term growth, but within healthcare, a half-decade historical view may miss recent innovations or disruptive industry trends. Moderna’s recent history marks a sharp pivot from its five-year trend as its revenue has shown annualized declines of 59% over the last two years.

This quarter, Moderna reported a rather uninspiring 65.6% year-on-year revenue decline to $966 million of revenue, in line with Wall Street’s estimates.

Looking ahead, sell-side analysts expect revenue to decline by 28.9% over the next 12 months. While this projection is better than its two-year trend, it's hard to get excited about a company that is struggling with demand.

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Operating Margin

Moderna has been an efficient company over the last five years. It was one of the more profitable businesses in the healthcare sector, boasting an average operating margin of 28.3%.

Looking at the trend in its profitability, Moderna’s operating margin decreased by 26.9 percentage points over the last five years. This performance was caused by more recent speed bumps as the company’s margin fell by 170.8 percentage points on a two-year basis. We’re disappointed in these results because it shows operating expenses were rising and it couldn’t pass those costs onto its customers.

In Q4, Moderna generated an operating profit margin of negative 129%, down 129.2 percentage points year on year. This contraction shows it was recently less efficient because its expenses increased relative to its revenue.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Moderna’s earnings losses deepened over the last five years as its EPS dropped 43.1% annually. We tend to steer our readers away from companies with falling EPS, where diminishing earnings could imply changing secular trends and preferences. If the tide turns unexpectedly, Moderna’s low margin of safety could leave its stock price susceptible to large downswings.

In Q4, Moderna reported EPS at negative $2.91, down from $0.55 in the same quarter last year. This print missed analysts’ estimates. Over the next 12 months, Wall Street expects Moderna to improve its earnings losses. Analysts forecast its full-year EPS of negative $9.29 will advance to negative $9.04.

Key Takeaways from Moderna’s Q4 Results

We struggled to find many positives in these results. Its full-year revenue guidance missed and its EPS fell short of Wall Street’s estimates. Overall, this was a weaker quarter. The stock traded down 3% to $31 immediately following the results.

Moderna’s earnings report left more to be desired. Let’s look forward to see if this quarter has created an opportunity to buy the stock. We think that the latest quarter is just one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.