Not Lilly. Not Johnson & Johnson. This Stock Will Be the Biggest Healthcare Winner of 2026

Healthcare stocks have rebounded this year. Many leaders in the sector have helped drive that performance. Eli Lilly (NYSE: LLY), the largest healthcare stock by market cap, has gained 16%, while Johnson & Johnson (NYSE: JNJ), another major healthcare player, has climbed 22%. However, among large-cap healthcare stocks, none has performed better than Moderna (NASDAQ: MRNA). The vaccine maker has soared over 600%, as of writing. Moderna is on track to be the biggest healthcare winner among large-cap stocks in 2026. But does that make the stock a buy?

Why Moderna stock has skyrocketed

Moderna rose to prominence after developing an effective coronavirus vaccine in record time during the early days of the pandemic. The biotech was well rewarded for its efforts. But demand for COVID-19 vaccines has declined in recent years. And even though Moderna had made some clinical and regulatory progress outside of that area -- it notably earned approval for a respiratory syncytial virus -- that has not allowed the company to maintain consistent revenue and earnings growth. That may be about to change.

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Moderna has now earned approval for mFLUSIVA, an influenza vaccine, for people aged 50 and older. mFLUSIVA could be successful, given that it is entering a multibillion-dollar market and has outperformed some approved flu vaccines in clinical trials. But one recent development was even more important for Moderna. The vaccine maker announced that its investigational personalized cancer vaccine, intismeran autogene, achieved a statistically significant improvement in recurrence-free survival when combined with Merck's (NYSE: MRK) Keytruda in certain patients with melanoma, compared with Keytruda alone.

Here's why that's such a big deal. Whereas traditional treatments target characteristics shared by many cancers, personalized vaccines are custom-made for each patient, potentially achieving greater efficacy. But until Moderna's recent win, no such product had produced positive Phase 3 clinical trial results. So, Moderna achieved a breakthrough that also helped demonstrate its ability to succeed outside the infectious disease market. It's no wonder that the company's shares skyrocketed.

Consider valuation

Intismeran autogene is likely to generate well over $1 billion in revenue, eventually. And it's important to note that this product is being developed across several other potential indications in oncology. What's more, Moderna has a pipeline with several other promising personalized cancer vaccines, as well as other mRNA-based products. The biotech company will likely experience significant clinical and regulatory wins over the next five years. By the end of the decade, Moderna should have at least a couple of new products on the market that generate steady revenue and earnings.

The business will probably perform well. But will the stock price follow suit? That's less clear. Moderna's innovative abilities are no longer in doubt. But after its recent run, the company's market cap stands at $90 billion. That's a substantial sum. Is the company really worth that much? Wall Street doesn't think so. Moderna's average price target is $123.61, according to Yahoo! Finance, which implies a downside of about 45% from current levels. Wall Street may be onto something.

Assume a required rate of return of 12% through the next five years, and a forward price-to-earnings ratio of 25 by 2031, a reasonable ratio for a biotech with strong growth prospects. Under these assumptions, Moderna would have to generate $6.34 billion in net income in 2032. During the first six months of 2026, the company racked up $534 million in revenue, an increase of 113.6% year over year, but posted a net loss of $2.1 billion, worse than the $1.8 billion loss reported in the year-ago period.

Moderna's new products will lift sales higher, but note that the company will share the profits from intismeran autogene equally with Merck, with which it is developing the personalized cancer vaccine. Also, while mFLUSIVA looks promising, the entire flu vaccine was worth about $9 billion last year. Could Moderna's commercialized products really combine to generate $12.68 billion by 2032? That's how much it would need to make for its profits to amount to $6.34 billion by then, under an extremely generous assumption of a 50% profit margin.

That seems unlikely unless Moderna launches other blockbuster products, which is certainly possible, but that might also not happen. Yet, that is factored into the current share price, and there seems to be no margin for error. In other words, it's best to avoid the stock at current levels.

Prosper Junior Bakiny has positions in Eli Lilly and Johnson & Johnson. The Motley Fool has positions in and recommends Eli Lilly, Merck, and Moderna. The Motley Fool recommends Johnson & Johnson. The Motley Fool has a disclosure policy.