Moderna (NASDAQ:) is down 35% in 2025, making it one of the worst-performing stocks among medical stocks and the broader market. Not surprisingly, the stock is down over 80% in the last 12 months. What may surprise investors is that the Moderna stock is down approximately 60% over the last five years. That means the stock has given back all the gains it made when the company’s COVID-19 vaccine entered the market, and then some.
One reason for Moderna’s sharp fall is the overall sentiment surrounding vaccines in general and mRNA (messenger RNA) technology in particular.
However, the stock has made single-digit gains in the last month, which could suggest investors are seeing a bottom. Other data points suggest that any bullish news could send Moderna stock much higher.
Why MRNA Stock Continues to Drift Lower
The words “vaccine skepticism” are now part of our national discourse around healthcare. The appointment of Robert Kennedy Jr. as Secretary of Health & Human Services has accelerated this discourse, which is creating some concern about the likelihood of vaccine approvals in the Trump administration.
Another example of news impacting the stock came on May 21. Moderna announced it was pulling its application for its combination flu/COVID-19 vaccine candidate. The company wants to wait on efficacy data from the ongoing late-stage trial of its influenza shot, which will be out later this year.
However, Moderna gave investors a heads-up on that news in early May. At that time, the company said it didn’t anticipate the combination shot would be approved until 2026 because more data on its flu shot was needed.
A third piece of news impacting the stock is the Trump administration’s recent move to give the United States “most-favored nation” status regarding pharmaceutical prices. The concern is that this will be a de facto form of price control.
However, it should be noted that Moderna stock has been up since that announcement, suggesting that the stock has formed a bottom.
MRNA Is Still the Future of Drug Discovery
Before 2020, most Americans had never heard of mRNA technology. However, drug companies have been experimenting with the technology since the late 1960s. Today, mRNA vaccines have emerged as promising alternatives to conventional vaccines.
The key benefits are ease of production, a lower production cost, a safety profile and high potency that make them ideal candidates for preventing and treating infectious diseases. This development process was aided by artificial intelligence in 2020, and AI will only help make mRNA drug development more efficient.
However, it’s important to note that the roots of mRNA were in developing a cancer vaccine. Moderna has several oncology vaccine candidates, including some in late-stage clinical trials. Although they may still be years away from approval, the fact that they are in development, many in partnership with Merck (NYSE:), shouldn’t be quickly dismissed.
How Likely Is a Short Squeeze?
Investors should consider two questions. First, are the conditions right for a short squeeze? That answer is undeniably yes. As of this writing, Moderna’s short interest data on MarketBeat shows that over 60 million shares are short.
That would require nearly six days of average trading volume to cover. If sentiment around the stock were to turn bullish, that’s a lot of fuel.
The second question is what might cause that sentiment to reverse?
The simple answer is that the sell-off in Moderna stock simply looks overdone. The positive news about vaccine boosters in the highest-risk market is advantageous to Moderna.
It shouldn’t be dismissed that the company has a deep pipeline and, for now, enough cash to get other candidates across the finish line.
Options Activity Suggests a Higher Price by Mid-Summer
A quick look at the options chain for Moderna in mid-August shows a significant number of call options with a $30 stock price. That would be after the company’s earnings report on August 7, suggesting that traders believe there could be a strong move in the stock.
Analysts have been lowering their price targets on Moderna stock since the company reported earnings in early May. However, the consensus price target of $53.95 is more than 100% higher than the stock’s price on May 21.
That would still have the stock price around its late 2020 levels before its COVID-19 vaccine was approved.
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