After Soaring Nearly 90% Thus Far in 2026, Is Moderna's Stock Still a Buy?

Shares of vaccine maker Moderna (NASDAQ: MRNA) have been rallying this year, and at one point, they were up more than double where they started the year. Growth investors appear to be encouraged by the company's long-term prospects and its promising flu vaccines.

While the rally may seem exciting, here's why I don't think it's destined to last. Moderna's stock, while volatile, remains high-risk.

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The company's pipeline is underwhelming

The big catalyst that seemed to boost Moderna's stock came around mid-June, when there was positive news about its seasonal influenza vaccine, mRNA-1010; an FDA advisory committee voted in favor of its benefit-risk profile. While it was a positive development for the company, it triggered a rally that, quite frankly, wasn't justified.

A seasonal flu vaccine isn't going to generate a boatload of revenue or solve the growth issues plaguing the business today. The mRNA-1010 vaccine, for instance, might generate $1 billion in revenue by 2028. It's a competitive space and for many of the best growth stocks in the sector, they pursue other, more enticing growth opportunities.

Much of Moderna's pipeline centers around flu vaccines, RSV, and products that simply aren't likely to be massive game changers for the business. The one exception is mRNA-4157, a personalized cancer vaccine that it is working on with Merck. But that remains in development and is no guarantee of obtaining approval.

Meanwhile, the company's losses continue to pile up, with Moderna incurring $3.4 billion in operating losses over the trailing 12 months, as its revenue declines and it remains dependent on COVID vaccine sales.

Moderna's valuation is high given the risk that the stock possesses

At more than $20 billion in market cap, Moderna's valuation is incredibly high for a company without a compelling growth catalyst in its portfolio. While it has many clinical trials underway, outside of mRNA-4157, it's hard to see a reason to be bullish on the stock at this valuation.

Typically, investors will discount a stock when it contains significant risk, but in Moderna's case, it's trading at a significant premium as if its success were a sure thing. The stock has fallen from a high of more than $85 it hit earlier this month, but that was an egregious valuation to begin with for the healthcare stock.

While it's now trading below $60, it could still fall much further.

David Jagielski, CPA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Merck and Moderna. The Motley Fool has a disclosure policy.