In the last 30 days, Moderna (NASDAQ:MRNA) stock is up nearly 11%. That’s welcome news to investors who bought shares prior to the selloff that started in September. At that time, MRNA stock was trading above $450 per share. However, for many reasons, Moderna is not likely to move significantly higher anytime soon. For that reason, investors should be careful about investing in the long term.
Let’s start with the good news. Moderna is projected to generate $21 billion in revenue from its Covid-19 vaccine. That number could go higher, but let’s just stick with that for now.
That’s a 13% increase from its 2021 revenue. Double-digit growth is always appreciated. However, it’s a far cry from the growth experienced between 2020 and 2021. That’s to be expected. Nevertheless, it’s likely Moderna will generate lower earnings, which is almost always a drag on a stock price.
The company is a leader in mRNA technology, and it does have a couple of other products that are in late-stage clinical trials. But this time around, the biotech giant won’t have Operation Warp Speed serving as a catalyst to get rapid approval. That means it’s likely to be late 2023 and possibly 2024 before a new product works its way through the process.
And Moderna does have a robust pipeline of other drugs and therapeutics in its pipeline. These could bring in billions in revenue, but not for several years. And getting them approved will take time and money. Currently Moderna’s research and development (R&D) expenses total about $2 billion annually, but the cost to earnings remains to be seen.
In the meantime, other biotech companies that use mRNA technology are likely to put drug candidates into clinical trials. And that makes sense because, according to Vantage Research, the global revenue for mRNA cancer vaccines and therapeutics is expected to be more than $100 billion by 2028. And if Moderna gets other products approved before its competitors, it may have time to pad its lead.
But that’s not a guarantee. For this reason, I see MRNA stock as making some sense as a short-term trade, but I would be hesitant to take a long-term position in the stock.
On the date of publication, Chris Markoch did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.