This Pharma Stock Was Left for Dead By The S&P… Now it’s My Top Dark Horse Pick for 2025

Yesterday, we talked about a chipmaker so undervalued it’s practically begging to be bought. (No need to thank me, just name your first yacht after me when it pays off.) Today, let’s switch lanes to a pharmaceutical stock that’s been beaten so badly it probably needs its own vaccine. Yes, we’re talking about Moderna (MRNA), the S&P 500’s punching bag of the year, down over 50% to a pitiful $43 per share. But is it a disaster, or a discount? Grab your shovel and let’s dig into the details.

Sure, the headline numbers look depressing. Moderna’s Covid-19 vaccine sales have fallen off a cliff (not shocking, considering we’re no longer in full pandemic mode). If that doesn’t sound bad enough, they’re burning over $4 billion annually on R&D. For context, that’s nearly as much as Amgen spends… and Amgen’s sales are 10 times larger. So, why even bother? For starters, Moderna is still pulling in $3 billion a year in revenue and sits on a mountain of cash ($9 billion, to be exact). That’s more than half its $16 billion market cap. The market might be undervaluing the cash-rich biotech with a pipeline that’s, well, not half bad.

Speaking of pipelines, Moderna isn’t just banking on Covid-19. It’s got promising projects lined up, including a flu-Covid combo vaccine, a personalized cancer vaccine developed with Merck, and candidates targeting CMV and norovirus. As far as numbers go… their cancer vaccine, combined with Merck’s Keytruda, reduced the risk of disease recurrence or death by 49% in a Phase 2b trial. That’s definitely something to be excited about going into 2025. There’s also talk of takeover interest, potentially from Merck, and even whispers about activist investors stepping in to trim the fat off Moderna’s hefty R&D budget. While nothing’s guaranteed, these possibilities could unlock significant shareholder value.

Wall Street isn’t exactly swooning. Most analysts are lukewarm, but HSBC’s Yifeng Liu recently upgraded the stock to “Buy” with a $58 price target, citing the undervalued pipeline. That’s a potential upside of 35%. Especially, since the company’s price-to-sales ratio sits at just 3.09, far below the industry average of 6.61. For bargain hunters, that’s a neon sign screaming, “Discount Opportunity!” Moderna isn’t the hottest girl at the bar. But at these prices, it’s not hard to see the appeal. You’re betting on a company with a proven mRNA platform, a deep pipeline, and a war chest of cash. If even a few of their pipeline projects pan out (say, the CMV vaccine or the cancer therapy) this stock could be a long-term winner.

Of course, risks remain. The delayed profitability target and the reliance on R&D success make this a speculative play. But if you’re willing to take on some risk for potentially outsized rewards, Moderna’s current valuation might be too good to pass up.

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Stock.News has positions in Moderna and Merck.