On Wednesday, Goldman Sachs analyst Salveen Richter downgraded Moderna (NASDAQ:MRNA) stock from Buy to Neutral, significantly reducing the price target to $51 from the previous $99. Trading at $44.94, the stock has experienced significant volatility, with a -63% return over the past six months. The downgrade follows a series of negative revisions to the company's product revenue guidance over the past six months, with InvestingPro data showing four analysts recently revising earnings downward. Moderna's recent forecast for fiscal year 2025 respiratory vaccine business revenue is set between $1.5 billion and $2.5 billion, with Goldman Sachs estimating the lower end of this range.
Richter's assessment points to concerns about Moderna's visibility on its revenue stream, which has led to a shift in cash breakeven guidance from 2026 to 2028. This shift is based on expense offsets anticipated by fiscal year 2025 and 2026. Financial metrics from InvestingPro underscore these concerns, showing a -44.29% revenue decline in the last twelve months and weak gross profit margins of -27.55%. Despite this, Goldman Sachs projects cash breakeven for Moderna will occur in 2029, factoring in the potential need for equity offerings in 2028 and 2029 to manage finances.
The analysis acknowledges potential pipeline developments that could impact Moderna's financials in the medium term. This includes the individualized neoantigen therapy (INT) being developed in partnership with Merck (NSE:PROR), which has shown promising data, although it lacks significant catalysts expected in 2025. Additional clinical data is anticipated from other partnerships, such as Phase 1/2 cystic fibrosis data with Vertex Pharmaceuticals (NASDAQ:VRTX) in the first half of 2025, Phase 3 cytomegalovirus vaccine data in 2025, and possibly Phase 3 norovirus vaccine data, depending on case accrual.
Goldman Sachs' position reflects a cautious outlook on Moderna's strategy, cash management, and the company's ability to execute clinically and commercially. While the company maintains a strong liquidity position with a current ratio of 4.39, InvestingPro analysis reveals the company is quickly burning through cash. For deeper insights into Moderna's financial health and future prospects, investors can access comprehensive Pro Research Reports covering 1,400+ top stocks, including detailed analysis of key metrics and growth potential. The firm will continue to monitor Moderna's operations and developments closely.
In other recent news, Moderna Inc (BMV:MRNA). has been making significant strides. The company recently secured a contract to supply its mRNA COVID-19 vaccine in the European Union, a deal that covers 17 countries and spans up to four years. The agreement allows Moderna to provide its vaccine in various formats, including prefilled syringes, a format favored by healthcare providers for its efficiency and reduced risk of administration errors.
Furthermore, Moderna's shares saw a surge following remarks by Oracle (NYSE:ORCL) Chairman Larry Ellison on the transformative potential of artificial intelligence (AI) in healthcare, particularly in early cancer detection and personalized vaccine development. This optimism was further fueled by a $500 billion private sector investment in AI infrastructure, involving a joint venture named Stargate with participation from OpenAI, SoftBank (TYO:9984), and Oracle.
Moderna also received a $590 million investment from the Department of Health and Human Services for the development of a bird flu vaccine. However, despite these advancements, analysts from InvestingPro expect a 53% revenue decline for the current year. The company has revised its 2025 revenue forecast to fall between $1.5 billion and $2.5 billion, prompting increased cost-cutting measures.
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