Moderna, Inc. (MRNA) Bundle
Understanding Moderna, Inc. (MRNA) Revenue Streams
Understanding Moderna, Inc.’s Revenue Streams
Moderna, Inc. generates revenue primarily through the sales of its COVID-19 and RSV vaccines. The following table summarizes the revenue breakdown by product and geographic location for the three and nine months ended September 30, 2024, compared to the same periods in 2023.
| Revenue Source | Three Months Ended September 30, 2024 (in millions) | Three Months Ended September 30, 2023 (in millions) | Nine Months Ended September 30, 2024 (in millions) | Nine Months Ended September 30, 2023 (in millions) |
|---|---|---|---|---|
| Net Product Sales | $1,820 | $1,757 | $2,171 | $3,878 |
| Other Revenue | $42 | $74 | $99 | $159 |
| Total Revenue | $1,862 | $1,831 | $2,270 | $4,037 |
Year-over-Year Revenue Growth Rate
For the three months ended September 30, 2024, total revenue increased by 2% compared to the same period in 2023. However, for the nine months ended September 30, 2024, total revenue decreased by 44% compared to the same period in 2023. This dramatic decline is primarily attributed to the transition of the COVID-19 vaccine market from pandemic-driven demand to a more seasonal commercial pattern.
Contribution of Different Business Segments to Overall Revenue
Net product sales for the third quarter of 2024 were primarily driven by sales of the COVID-19 vaccine, accounting for $1,810 million, while the RSV vaccine contributed $10 million in sales. The following table outlines the net product sales by geographic location for the three and nine months ended September 30, 2024, compared to the same periods in 2023.
| Geographic Location | Three Months Ended September 30, 2024 (in millions) | Three Months Ended September 30, 2023 (in millions) | Nine Months Ended September 30, 2024 (in millions) | Nine Months Ended September 30, 2023 (in millions) |
|---|---|---|---|---|
| United States | $1,215 | $913 | $1,477 | $916 |
| Europe | $281 | $103 | $281 | $739 |
| Rest of World | $324 | $741 | $413 | $2,223 |
| Total | $1,820 | $1,757 | $2,171 | $3,878 |
Analysis of Significant Changes in Revenue Streams
The significant changes in revenue streams are highlighted by a 44% decline in net product sales for the nine months ended September 30, 2024, compared to the same period in 2023. This decline reflects a shift to a seasonal commercial model for COVID-19 vaccines, significantly affecting overall revenue. Additionally, other revenue decreased by 43% and 38% for the three and nine months ended September 30, 2024, respectively, largely due to reduced grant revenue under agreements with the Biomedical Advanced Research and Development Authority (BARDA).
The table below summarizes the other revenue components for the three and nine months ended September 30, 2024, compared to the same periods in 2023.
| Other Revenue Source | Three Months Ended September 30, 2024 (in millions) | Three Months Ended September 30, 2023 (in millions) | Nine Months Ended September 30, 2024 (in millions) | Nine Months Ended September 30, 2023 (in millions) |
|---|---|---|---|---|
| Grant Revenue | $7 | $44 | $27 | $96 |
| Collaboration Revenue | $28 | $30 | $35 | $63 |
| Licensing and Royalty Revenue | $7 | $0 | $37 | $0 |
| Total Other Revenue | $42 | $74 | $99 | $159 |
A Deep Dive into Moderna, Inc. (MRNA) Profitability
Profitability Metrics
Gross Profit Margin: For the three months ended September 30, 2024, the gross profit margin was 72%, with net product sales of $1.82 billion and cost of sales of $514 million. This marks a significant improvement compared to the gross profit margin of (28%) for the same period in 2023, when net product sales were $1.76 billion and cost of sales was $2.24 billion.
Operating Profit Margin: The operating loss for the three months ended September 30, 2024, was ($70 million), resulting in an operating profit margin of (3.8%). In comparison, for the same period in 2023, the operating loss was ($2.01 billion), with an operating profit margin of (110.4%).
Net Profit Margin: For the third quarter of 2024, the net income was $13 million, leading to a net profit margin of 0.7%. This contrasts sharply with the net loss of ($3.63 billion)(206.5%).
Trends in Profitability Over Time
In the nine months ended September 30, 2024, the total revenue was $2.27 billion, down 44% from $4.04 billion in 2023. The operating loss for the nine-month period was ($2.70 billion), a decrease of 36% compared to ($4.25 billion) in the previous year.
Comparison of Profitability Ratios with Industry Averages
As of 2024, the average gross profit margin for companies in the biotechnology sector is approximately 80%. The gross profit margin of 72% for this company is below the industry average. The operating margin of (3.8%) also lags behind the industry average of 10% for biotechnology firms.
Analysis of Operational Efficiency
Cost Management: The cost of sales for the three months ended September 30, 2024, was 28% of net product sales, a drastic reduction from 128% in the same period of 2023. This improvement is attributed to strategic cost initiatives aimed at enhancing manufacturing efficiency and reducing inventory write-downs.
Gross Margin Trends: The gross margin for the nine months ended September 30, 2024, was 67%, compared to a gross margin of (3%) for the same period in 2023.
| Metric | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Net Product Sales | $1.82 billion | $1.76 billion | $2.17 billion | $3.88 billion |
| Cost of Sales | $514 million | $2.24 billion | $725 million | $3.76 billion |
| Gross Profit Margin | 72% | (28%) | 67% | (3%) |
| Operating Loss | ($70 million) | ($2.01 billion) | ($2.70 billion) | ($4.25 billion) |
| Net Income (Loss) | $13 million | ($3.63 billion) | ($2.44 billion) | ($4.93 billion) |
Debt vs. Equity: How Moderna, Inc. (MRNA) Finances Its Growth
Debt vs. Equity: How Moderna, Inc. Finances Its Growth
As of September 30, 2024, Moderna, Inc. had total liabilities amounting to $15.8 billion and total stockholders' equity of $11.9 billion. This financial structure highlights the company's reliance on both debt and equity to support its growth initiatives.
Overview of the Company's Debt Levels
Moderna's total debt consists of both long-term and short-term obligations. As of the latest reporting, the company maintained $2.7 billion in long-term debt and $1.4 billion in short-term debt. The total debt to equity ratio is calculated at approximately 0.23, indicating a conservative leverage position compared to industry averages.
Debt-to-Equity Ratio and Comparison to Industry Standards
The debt-to-equity ratio of 0.23 is significantly lower than the biotechnology industry average, which typically ranges from 0.4 to 0.6. This lower ratio suggests that the company has a more robust equity base relative to its debt load, potentially providing greater financial stability.
Recent Debt Issuances, Credit Ratings, or Refinancing Activity
In March 2024, Moderna entered into a development and commercialization funding arrangement with Blackstone, committing to provide up to $750 million to support the development of investigational mRNA-based vaccines. As of September 30, 2024, the company had a credit rating of Baa2 from Moody's, indicating a moderate credit risk.
How the Company Balances Between Debt Financing and Equity Funding
Moderna has utilized a mix of debt and equity financing to fund its operations and growth. For the nine months ending September 30, 2024, the company reported net cash provided by financing activities of $59 million, primarily from equity issuances. The company has also maintained significant retained earnings of $11.2 billion.
| Item | Amount (in millions) |
|---|---|
| Total Liabilities | $15,803 |
| Total Stockholders' Equity | $11,927 |
| Long-Term Debt | $2,700 |
| Short-Term Debt | $1,400 |
| Debt-to-Equity Ratio | 0.23 |
| Retained Earnings | $11,200 |
| Credit Rating | Baa2 |
Assessing Moderna, Inc. (MRNA) Liquidity
Assessing Financial Health: Liquidity and Solvency
Current and Quick Ratios
The liquidity position of the company can be assessed through its current and quick ratios. As of September 30, 2024, the current ratio is calculated as follows:
- Current Assets: $9,666 million
- Current Liabilities: $2,201 million
- Current Ratio = Current Assets / Current Liabilities = $9,666 million / $2,201 million = 4.39
The quick ratio, which excludes inventory from current assets, is calculated as:
- Current Assets (excluding inventory): $9,666 million - $412 million = $9,254 million
- Quick Ratio = (Current Assets - Inventory) / Current Liabilities = $9,254 million / $2,201 million = 4.20
Analysis of Working Capital Trends
Working capital, defined as current assets minus current liabilities, was reported as follows:
- As of September 30, 2024: $7,465 million
- As of December 31, 2023: $7,310 million
This indicates an increase in working capital by $155 million year-over-year, primarily due to:
- An increase in accounts receivable by $672 million
- A decrease in accrued liabilities and accounts payable by $569 million
- An increase in inventory by $210 million
Cash Flow Statements Overview
The cash flow statement reveals the following trends for the nine months ended September 30, 2024:
| Cash Flow Type | 2024 (in millions) | 2023 (in millions) |
|---|---|---|
| Net cash used in operating activities | $(3,829) | $(3,740) |
| Net cash provided by investing activities | $2,488 | $4,744 |
| Net cash provided by financing activities | $59 | $(1,268) |
Operating activities generated $(3,829 million in cash flow, reflecting a net loss of $(2,441 million and adjustments including stock-based compensation of $325 million and depreciation of $129 million.
Investing activities provided $2,488 million, primarily from the sales and maturities of marketable securities, which amounted to $7,677 million in proceeds, offset by $4,641 million in purchases of marketable securities.
Financing activities resulted in a net cash inflow of $59 million, mainly from the issuance of common stock through equity plans.
Potential Liquidity Concerns or Strengths
Despite the substantial cash flow used in operating activities, the current and quick ratios indicate a strong liquidity position. However, as of September 30, 2024, cash and cash equivalents decreased to $1,644 million from $2,907 million at the end of 2023. This decrease of $1.3 billion raises potential liquidity concerns moving forward.
Furthermore, the company has significant future capital requirements, including ongoing research and development costs, which may impact liquidity if not managed effectively. As of September 30, 2024, the company had $443 million in deferred revenue related to customer deposits for its COVID-19 vaccine, indicating some cash inflow is expected in the near term.
Overall, while the company maintains a solid liquidity position as indicated by its ratios, the cash outflow from operations and the decrease in cash reserves warrant close monitoring.
Is Moderna, Inc. (MRNA) Overvalued or Undervalued?
Valuation Analysis
Price-to-Earnings (P/E) Ratio
The current price-to-earnings (P/E) ratio for the company as of September 30, 2024, is approximately – (not applicable due to net losses). The earnings per share (EPS) for the third quarter of 2024 is $0.03, compared to a loss per share of $(9.53) in the same period of 2023.
Price-to-Book (P/B) Ratio
The price-to-book (P/B) ratio is calculated using the book value per share. As of September 30, 2024, the book value per share is approximately $30.99 based on total stockholders' equity of $11.9 billion and 385 million shares outstanding.
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
The enterprise value (EV) is roughly $10.84 billion, while the EBITDA for the trailing twelve months is – (not applicable due to net losses). Thus, the EV/EBITDA ratio remains undefined.
Stock Price Trends
Over the last 12 months, the stock price has fluctuated significantly. As of September 30, 2024, the stock price stands at approximately $28.25, down from a high of about $150.00 in 2023.
Dividend Yield and Payout Ratios
As of September 30, 2024, there is no dividend yield or payout ratio, as the company does not currently pay dividends.
Analyst Consensus
Analyst consensus on stock valuation indicates a Hold rating, with a price target range between $25.00 and $35.00.
| Metric | Value |
|---|---|
| P/E Ratio | – |
| EPS (Q3 2024) | $0.03 |
| P/B Ratio | – |
| Book Value per Share | $30.99 |
| EV | $10.84 billion |
| Stock Price (Sept 2024) | $28.25 |
| Dividend Yield | 0% |
| Analyst Consensus | Hold |
Key Risks Facing Moderna, Inc. (MRNA)
Key Risks Facing Moderna, Inc.
Moderna, Inc. faces several internal and external risks that could impact its financial health and operational performance. Below is a breakdown of the key risk factors identified:
Industry Competition
The competitive landscape in the biotechnology and pharmaceutical sectors is intense. The emergence of new players and advancements in vaccine technology pose significant challenges. For instance, as of September 30, 2024, net product sales decreased by $1.7 billion, or 44%, compared to the same period in 2023, reflecting reduced overall demand and increased competition in the COVID-19 vaccine market.
Regulatory Changes
Regulatory approvals are critical for the commercialization of new products. The company experienced a 100% decrease in the provision for income taxes due to the establishment of a $1.7 billion valuation allowance on deferred tax assets in the third quarter of 2023. This situation limits the company's ability to recognize tax benefits from losses.
Market Conditions
The transition of the COVID-19 vaccine market from a pandemic-driven demand to a seasonal commercial model is impacting revenue. For the full year of 2024, net product sales are anticipated to decline further, indicating a shift in market conditions.
Operational Risks
Operational challenges include inventory management and manufacturing capacity. As of September 30, 2024, the cost of sales was reported at $514 million for the three months ended, which included inventory write-downs of $214 million. Additionally, unutilized manufacturing capacity and wind-down costs amounted to $27 million during the same period.
Financial Risks
Financial risks include liquidity concerns and cash flow management. Net cash used in operating activities for the nine months ended September 30, 2024, was $3.8 billion, compared to $3.7 billion for the same period in 2023. This reflects ongoing operational challenges and reduced revenue generation capabilities.
Strategic Risks
Strategic risks are tied to the development pipeline and market positioning. The company has incurred significant losses, with a net loss of $2.4 billion for the nine months ended September 30, 2024. Future capital requirements are expected to remain high as the company continues to invest in research and development across various vaccine candidates.
Mitigation Strategies
To address these risks, the company has initiated several strategic actions:
- Resizing manufacturing operations to enhance efficiency, which has resulted in a significant reduction in costs.
- Maintaining substantial cash reserves, with cash and cash equivalents of $1.6 billion as of September 30, 2024.
- Focusing on expanding the product pipeline, including new vaccines for RSV and next-generation COVID-19 variants.
| Risk Factor | Description | Impact (2024) |
|---|---|---|
| Industry Competition | Emergence of new players and technologies | Net sales decrease of $1.7 billion (44%) |
| Regulatory Changes | Valuation allowance on deferred tax assets | Provision for taxes decreased by $1.7 billion |
| Market Conditions | Shift from pandemic to seasonal demand | Decline in net product sales expected |
| Operational Risks | Inventory management and unutilized capacity | Cost of sales at $514 million, including $214 million in write-downs |
| Financial Risks | Cash flow and liquidity management | Net cash used in operations at $3.8 billion |
| Strategic Risks | Development pipeline and market positioning | Net loss of $2.4 billion |
Future Growth Prospects for Moderna, Inc. (MRNA)
Future Growth Prospects for Moderna, Inc.
Analysis of Key Growth Drivers
Moderna is positioned for significant growth through various drivers, including product innovations and market expansions. The company has recently launched its RSV vaccine, which received FDA approval in May 2024 for adults aged 60 years and older, marking a pivotal expansion into the respiratory virus vaccine market.
Future Revenue Growth Projections and Earnings Estimates
For the full year of 2024, net product sales are projected to decrease by approximately 44%, reflecting the transition of the COVID-19 vaccine market to a seasonal commercial model. Despite this decline, the company anticipates higher demand for its COVID-19 and RSV vaccines during the fall and winter seasons. Additionally, earnings per share for the third quarter of 2024 was reported at $0.03, a recovery from a loss per share of $(9.53) in the same quarter of 2023.
Strategic Initiatives or Partnerships Driving Future Growth
Moderna has entered into a development and commercialization funding arrangement with Blackstone Life Sciences, committing up to $750 million to support the development of its investigational mRNA-based influenza vaccine. This partnership is expected to enhance the company's pipeline of vaccines and strengthen its market position.
Competitive Advantages Positioning the Company for Growth
Moderna's competitive advantages include its cutting-edge mRNA technology platform, which has proven effective in rapidly developing vaccines. The company has achieved significant milestones, such as the $8.4 billion net income for 2022. As of September 30, 2024, Moderna reported total cash, cash equivalents, and investments of $9.2 billion, providing a solid financial foundation for ongoing research and development.
| Financial Metrics | 2024 (Projected) | 2023 |
|---|---|---|
| Net Product Sales | $2.171 billion | $3.878 billion |
| Net Income | $8.4 billion | $12.2 billion |
| Earnings Per Share | $0.03 | $(9.53) |
| Cash and Cash Equivalents | $1.644 billion | $2.907 billion |
| Deferred Revenue | $443 million | $613 million |
Overall, the combination of innovative product development, strategic partnerships, and a robust financial position will be crucial for Moderna as it navigates future growth opportunities in a changing market landscape.
Moderna, Inc. (MRNA) DCF Excel Template
5-Year Financial Model
40+ Charts & Metrics
DCF & Multiple Valuation
Free Email Support
Updated on 16 Nov 2024
Resources:
- Moderna, Inc. (MRNA) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Moderna, Inc. (MRNA)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Moderna, Inc. (MRNA)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.