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Moderna, Inc. 10-K Analysis & Summary – 2/21/2025

⚠️This is not investment advice.

⚠️ This is an experimental project and this report is for informational purposes only and should not be considered investment advice. Conduct your own thorough research and consult with a qualified financial advisor before making any investment decisions. ⚠️

Moderna, Inc.

Filing date:

02/21/2025

TLDR:

Moderna’s 2024 results show a revenue decline due to decreased COVID vaccine sales, despite the approval of their RSV vaccine. The company is focusing on cost efficiency and pipeline development.

ELI5:

Moderna made less money in 2024 because fewer people needed COVID vaccines, even though they launched a new RSV vaccine. They’re trying to cut costs and develop new products to make more money in the future.

Accession #:

0001682852-25-000022

Published on

Analyst Summary

  • Net product sales decreased significantly from $6.7 billion in 2023 to $3.1 billion in 2024.
  • A net loss of $3.6 billion was reported for 2024, compared to a net loss of $4.7 billion in 2023.
  • Cash, cash equivalents, and investments decreased from $13.3 billion in 2023 to $9.5 billion in 2024.
  • Net cash used in operating activities was $3.0 billion.
  • Gross Profit Margin increased by 23.2% from 31.5% to 54.7%.
  • Operating Profit Margin decreased by 60.8% from -61.9% to -122.7%.
  • Net Profit Margin decreased by 41.1% from -68.8% to -109.9%.
  • Basic and Diluted EPS increased by $3.05 from $ -12.33 to $ -9.28.
  • Current Ratio increased by 0.24 from 3.43 to 3.67.
  • Quick Ratio increased by 0.26 from 3.36 to 3.62.
  • Cash Ratio decreased by 0.09 from 0.96 to 0.87.
  • Debt-to-Equity Ratio decreased by 0.03 from 0.33 to 0.30.
  • Debt-to-Assets Ratio decreased by 0.02 from 0.25 to 0.23.
  • Interest Coverage Ratio decreased by 51.5 from -111.9 to -163.4.
  • Inventory Turnover decreased by 4.54 from 13.53 to 8.99.
  • Days Sales Outstanding decreased by 7.2 days from 47.5 days to 40.3 days.
  • Days Payable Outstanding increased by 60.7 days from 40.4 days to 101.1 days.
  • Asset Turnover decreased by 0.14 from 0.37 to 0.23.
  • Revenue decreased by 52.8%.
  • Net loss decreased by 24.5%.
  • EPS increased by 24.7%.

Opportunities and Risks

  • Market Uncertainty: Evolving dynamics in the COVID and RSV vaccine markets.
  • Competition: Intense competition from established pharmaceutical companies.
  • Regulatory Hurdles: Potential delays in obtaining regulatory approvals.
  • Manufacturing Challenges: Difficulties in manufacturing, product release, and supply chain management.
  • Intellectual Property: Risks related to patent protection and potential infringement claims.
  • Financial Performance: Continued net losses and potential difficulties in achieving profitability.
  • Pipeline Potential: Robust pipeline with multiple programs in late-stage development.
  • mRNA Platform: Versatile mRNA platform with potential applications across various therapeutic areas.
  • Cost Efficiency: Focus on cost efficiency and portfolio prioritization.
  • Strategic Alliances: Potential for strategic alliances to drive development and commercialization.

Potential Implications

Company Performance

  • Future success hinges on successfully commercializing new products and managing operating expenses.
  • Company faces significant challenges in the evolving vaccine market, particularly with declining COVID vaccine sales.
  • Strong mRNA platform, robust pipeline, and focus on cost efficiency provide opportunities for future growth.

Moderna, Inc. (MRNA) 2024 10-K Report Analysis

Executive Summary

This report analyzes Moderna, Inc.’s 2024 10-K filing. Key findings include a significant decrease in revenue compared to previous years, driven by declining COVID vaccine sales, despite the approval of their RSV vaccine. The company is focusing on cost efficiency, portfolio prioritization, and launching new products. While Moderna possesses a strong mRNA platform and a robust pipeline, uncertainties in the vaccine market and intense competition pose significant risks. Overall, a cautious outlook is warranted, pending successful execution of their strategic priorities and market acceptance of new products.

Company Overview

Moderna, Inc. is a biotechnology company specializing in mRNA therapeutics and vaccines. The company’s primary focus is on developing and commercializing mRNA-based products for infectious diseases, cancer, and rare diseases. 2024 saw the approval of their second commercial product, an RSV vaccine, but also a significant decline in COVID vaccine revenue.

Detailed Analysis

Management’s Discussion and Analysis (MD&A)

Management acknowledges the evolving dynamics in the COVID and RSV vaccine markets and emphasizes a focus on ten product approvals over the next three years. They also highlight cost efficiency measures, including a planned $1 billion reduction in R&D expenses by 2027. The tone is cautiously optimistic, balancing the challenges with the potential of their pipeline.

Financial Statement Analysis

Income Statement

Key observations:

  • Revenue: Net product sales decreased significantly from $6.7 billion in 2023 to $3.1 billion in 2024.
  • Cost of Sales: Decreased substantially, but remains a significant portion of revenue.
  • R&D Expenses: Decreased slightly, reflecting cost efficiency efforts.
  • Net Loss: A net loss of $3.6 billion was reported for 2024, compared to a net loss of $4.7 billion in 2023.

Key Ratios:

  • Gross Margin: Improved due to lower cost of sales, but still impacted by write-downs and unutilized capacity.
  • R&D as % of Revenue: Increased, reflecting continued investment in pipeline development despite revenue decline.

Balance Sheet

Key observations:

  • Cash, Cash Equivalents, and Investments: Decreased from $13.3 billion in 2023 to $9.5 billion in 2024.
  • Working Capital: Decreased, reflecting the use of cash for operations.

Cash Flow Statement

Key observations:

  • Operating Activities: Net cash used in operating activities was $3.0 billion.
  • Investing Activities: Net cash provided by investing activities was $1.9 billion, primarily from maturities and sales of marketable securities.
  • Financing Activities: Net cash provided by financing activities was $56 million.

Red Flags and Uncommon Metrics

  • Inventory Write-Downs: Significant inventory write-downs indicate challenges in forecasting demand and managing inventory levels.
  • Customer Concentration: A significant portion of revenue is derived from a limited number of customers, creating customer concentration risk.

Risk and Opportunity Assessment

Risks

  • Market Uncertainty: Evolving dynamics in the COVID and RSV vaccine markets.
  • Competition: Intense competition from established pharmaceutical companies.
  • Regulatory Hurdles: Potential delays in obtaining regulatory approvals.
  • Manufacturing Challenges: Difficulties in manufacturing, product release, and supply chain management.
  • Intellectual Property: Risks related to patent protection and potential infringement claims.
  • Financial Performance: Continued net losses and potential difficulties in achieving profitability.

Opportunities

  • Pipeline Potential: Robust pipeline with multiple programs in late-stage development.
  • mRNA Platform: Versatile mRNA platform with potential applications across various therapeutic areas.
  • Cost Efficiency: Focus on cost efficiency and portfolio prioritization.
  • Strategic Alliances: Potential for strategic alliances to drive development and commercialization.

Conclusion and Actionable Insights

Moderna faces significant challenges in the evolving vaccine market, particularly with declining COVID vaccine sales. However, the company’s strong mRNA platform, robust pipeline, and focus on cost efficiency provide opportunities for future growth. Investors should closely monitor the company’s progress in obtaining regulatory approvals for new products, managing manufacturing challenges, and executing its strategic priorities.

Moderna, Inc. Financial Analysis – 2024

This report analyzes Moderna’s financial performance based on its 2024 10-K filing, comparing it to 2023 and 2022 data where available. Industry comparisons are based on general knowledge of the biotechnology sector.

1. Financial Ratio and Metric Analysis

Profitability

  • Gross Profit Margin:

    • Calculation: ($3,236 – $1,464) / $3,236 = 54.7%
    • Trend: ($6,848 – $4,693) / $6,848 = 31.5%. Increase of 23.2%
    • Industry: Biotechnology companies can have highly variable gross margins depending on their product mix and stage of development. Established pharmaceutical companies often have higher gross margins (60-80%) due to economies of scale and established product lines. Moderna’s gross margin is within a reasonable range for a company with a growing but still concentrated product portfolio.
  • Operating Profit Margin:

    • Calculation: ($3,236 – $7,181) / $3,236 = -122.7%
    • Trend: ($6,848 – $11,087) / $6,848 = -61.9%. Decrease of 60.8%
    • Industry: Negative operating margins are common for biotech companies investing heavily in R&D. The key is the trend and the potential for future profitability as products are commercialized.
  • Net Profit Margin:

    • Calculation: ($ -3,561) / $3,236 = -109.9%
    • Trend: ($ -4,714) / $6,848 = -68.8%. Decrease of 41.1%
    • Industry: Similar to operating margin, a negative net profit margin is not unusual for a biotech company focused on growth and R&D.
  • Return on Assets (ROA):

    • Calculation: ($ -3,561) / $14,142 = -25.2%
    • Trend: To determine the trend, we would need the ROA from the previous comparable period, which is not provided in the filing.
    • Industry: A negative ROA indicates the company is not generating profit from its assets. This is not unexpected for a company investing heavily in R&D.
  • Return on Equity (ROE):

    • Calculation: ($ -3,561) / $10,901 = -32.7%
    • Trend: To determine the trend, we would need the ROE from the previous comparable period, which is not provided in the filing.
    • Industry: A negative ROE reflects the net loss and its impact on shareholder equity.
  • Earnings Per Share (EPS) – Basic and Diluted:

    • Calculation: Basic and Diluted EPS = $ -9.28
    • Trend: Basic and Diluted EPS in 2023 = $ -12.33. Increase of $3.05
    • Industry: Negative EPS is typical for biotech companies in the development stage.

Liquidity

  • Current Ratio:

    • Calculation: $8,099 / $2,206 = 3.67
    • Trend: $10,325 / $3,015 = 3.43. Increase of 0.24
    • Industry: A current ratio above 1 indicates the company has more current assets than current liabilities. A ratio of 3.67 suggests strong liquidity.
  • Quick Ratio (Acid-Test Ratio):

    • Calculation: ($8,099 – $117) / $2,206 = 3.62
    • Trend: ($10,325 – $202) / $3,015 = 3.36. Increase of 0.26
    • Industry: The quick ratio is similar to the current ratio but excludes inventory. A ratio of 3.62 indicates good short-term liquidity.
  • Cash Ratio:

    • Calculation: $1,927 / $2,206 = 0.87
    • Trend: $2,907 / $3,015 = 0.96. Decrease of 0.09
    • Industry: The cash ratio is the most conservative liquidity measure, focusing on cash and cash equivalents. A ratio of 0.87 suggests that Moderna can cover 87% of its current liabilities with its most liquid assets.

Solvency/Leverage

  • Debt-to-Equity Ratio:

    • Calculation: $3,241 / $10,901 = 0.30
    • Trend: $4,572 / $13,854 = 0.33. Decrease of 0.03
    • Industry: A debt-to-equity ratio of 0.30 indicates a relatively low level of debt compared to equity.
  • Debt-to-Assets Ratio:

    • Calculation: $3,241 / $14,142 = 0.23
    • Trend: $4,572 / $18,426 = 0.25. Decrease of 0.02
    • Industry: A debt-to-assets ratio of 0.23 suggests that 23% of Moderna’s assets are financed by debt.
  • Interest Coverage Ratio (Times Interest Earned):

    • Calculation: ($ -3,945 + $24) / $24 = -163.4
    • Trend: ($ -4,239 + $38) / $38 = -111.9. Decrease of 51.5
    • Industry: A negative interest coverage ratio indicates that Moderna’s operating loss is not sufficient to cover its interest expense. This is a concern, but not uncommon for companies investing heavily in R&D.

Activity/Efficiency

  • Inventory Turnover:

    • Calculation: $1,464 / (($117 + $202)/2) = 8.99
    • Trend: $4,693 / (($202 + $492)/2) = 13.53. Decrease of 4.54
    • Industry: Inventory turnover measures how efficiently a company manages its inventory. A turnover of 8.99 means Moderna sells its average inventory about 9 times per year.
  • Days Sales Outstanding (DSO):

    • Calculation: ($358 / $3,236) * 365 = 40.3 days
    • Trend: ($892 / $6,848) * 365 = 47.5 days. Decrease of 7.2 days
    • Industry: DSO measures the average number of days it takes a company to collect payment after a sale. A DSO of 40.3 days is within a reasonable range.
  • Days Payable Outstanding (DPO):

    • Calculation: ($405 / $1,464) * 365 = 101.1 days
    • Trend: ($520 / $4,693) * 365 = 40.4 days. Increase of 60.7 days
    • Industry: DPO measures the average number of days it takes a company to pay its suppliers. A DPO of 101.1 days is within a reasonable range.
  • Asset Turnover:

    • Calculation: $3,236 / $14,142 = 0.23
    • Trend: $6,848 / $18,426 = 0.37. Decrease of 0.14
    • Industry: Asset turnover measures how efficiently a company uses its assets to generate revenue. A ratio of 0.23 indicates that Moderna generates $0.23 of revenue for every $1 of assets.

Valuation

  • Price-to-Earnings Ratio (P/E):

    • Calculation: $35.53 / (-9.28) = N/A (Negative Earnings)
    • Trend: N/A (Negative Earnings)
    • Industry: P/E ratio is not meaningful when earnings are negative.
  • Price-to-Book Ratio (P/B):

    • Calculation: Market Cap = 386,000,000 * $35.53 = $13,714,580,000. P/B = $13,714,580,000 / $10,901,000,000 = 1.26
    • Trend: To determine the trend, we would need the P/B from the previous comparable period, which is not provided in the filing.
    • Industry: A P/B ratio of 1.26 suggests the market values Moderna slightly above its book value.
  • Price-to-Sales Ratio (P/S):

    • Calculation: $13,714,580,000 / $3,236,000,000 = 4.24
    • Trend: To determine the trend, we would need the P/S from the previous comparable period, which is not provided in the filing.
    • Industry: A P/S ratio of 4.24 indicates how much investors are willing to pay for each dollar of Moderna’s sales.
  • Enterprise Value to EBITDA (EV/EBITDA):

    • Calculation: EBITDA = ($ -3,945) + $189 + $429 = $ -3,327. EV = $13,714,580,000 + $3,241,000,000 – $1,927,000,000 = $15,028,580,000. EV/EBITDA = N/A (Negative EBITDA)
    • Trend: N/A (Negative EBITDA)
    • Industry: EV/EBITDA is not meaningful when EBITDA is negative.

Growth Rates

  • Revenue Growth:

    • Calculation: ($3,236 – $6,848) / $6,848 = -52.8%
    • Trend: Revenue decreased by 52.8%
    • Industry: Revenue growth is a key metric for biotech companies.
  • Net Income Growth:

    • Calculation: ($-3,561 – $-4,714) / $-4,714 = -24.5%
    • Trend: Net loss decreased by 24.5%
    • Industry: Net income growth is a key metric for biotech companies.
  • EPS Growth:

    • Calculation: ($-9.28 – $-12.33) / $-12.33 = -24.7%
    • Trend: EPS increased by 24.7%
    • Industry: EPS growth is a key metric for biotech companies.

Other Relevant Metrics

  • COVID and RSV Revenue: Moderna’s revenue is increasingly shifting from COVID vaccines to RSV vaccines. COVID vaccine revenue decreased from $6.671 billion in 2023 to $3.084 billion in 2024, while RSV vaccine revenue was $25 million in 2024, with no revenue in 2023. This indicates a transition in Moderna’s product portfolio.

2. Commentary

Moderna’s financial performance in 2024 reflects a company in transition, moving beyond its initial COVID-19 focus. Revenue declined significantly due to decreased COVID vaccine sales, resulting in negative profit margins and returns. However, the company maintains a strong liquidity position and a relatively low debt-to-equity ratio. The introduction of the RSV vaccine represents a positive step towards diversifying revenue streams, but overall profitability remains a challenge. Moderna’s future success hinges on its ability to successfully commercialize new products and manage its operating expenses.

⚠️ This is an experimental project and this report is for informational purposes only and should not be considered investment advice. Conduct your own thorough research and consult with a qualified financial advisor before making any investment decisions. ⚠️