• Wondering whether Moderna's current share price still reflects its true value, or if the market has moved on too quickly.
• The stock closed at US$46.71, with a 51.4% return year to date and a 91.2% return over the last year, set against weaker 3 year and 5 year returns of 65.1% and 70.6% declines.
• These swings in performance come as Moderna continues to be closely watched by investors, with sentiment moving between enthusiasm and caution. That backdrop helps explain why the stock has had strong recent returns alongside a history of deeper drawdowns.
• According to Simply Wall St's valuation checks, Moderna scores 1 out of 6 for being undervalued. The next step is to look at what different valuation methods say today and then consider a broader way of thinking about value that will be covered at the end of this article.

Moderna scores just 1/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Moderna Discounted Cash Flow (DCF) Analysis

A DCF model takes estimates of a company’s future cash flows, then discounts them back to today to arrive at an implied value per share. For Moderna, the model used is a 2 Stage Free Cash Flow to Equity approach based on projected free cash flows in $.

Moderna’s latest twelve month free cash flow is a loss of $1,866.3m. Analyst inputs and subsequent extrapolations point to free cash flow remaining negative for several years, with projected values such as $3,219.7m and $1,502.9m in outflows in 2026 and 2027, before moving to a projected inflow of $117.5m by 2030. Simply Wall St extends analyst estimates beyond the formal forecast window to build a ten year path for these cash flows.

After discounting all those future cash flows back to today, the model arrives at an estimated intrinsic value of about $3.90 per share. Compared with the recent share price of $46.71, this DCF output suggests the stock is very significantly overvalued, with an implied premium of roughly 1,097.2%.

Result: OVERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Moderna may be overvalued by 1097.2%. Discover 51 high quality undervalued stocks or create your own screener to find better value opportunities.

Approach 2: Moderna Price vs Sales

For companies where earnings are not yet a steady guide, investors often lean on the price to sales, or P/S, ratio, because revenue tends to be less volatile than profits and still anchors the valuation to the size of the business.

Expectations for future growth and the level of risk usually influence what feels like a normal or fair P/S multiple. Faster, higher margin or lower risk companies often support higher ratios than slower or riskier peers.

Moderna currently trades on a P/S ratio of 8.33x. This sits close to the Biotechs industry average P/S of 10.82x and the peer average of 8.05x, so on simple comparisons the stock is not far from the wider group.

Simply Wall St also uses a proprietary Fair Ratio, which estimates what P/S multiple might make sense given factors such as earnings growth, industry, profit margin, market cap and key risks. Because it blends these company specific inputs with sector context, the Fair Ratio can be more tailored than a straight comparison with industry or peer averages.

For Moderna, the Fair Ratio is 1.56x, which is well below the current 8.33x. On this basis, the stock screens as expensive relative to that Fair Ratio.

Result: OVERVALUED

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Upgrade Your Decision Making: Choose your Moderna Narrative

Earlier it was mentioned that there is an even better way to understand valuation. Meet Narratives, a simple way for you to put a story behind the numbers by linking your view of Moderna’s future revenue, earnings and margins to a financial forecast and an assumed fair value. You can then compare that fair value with today’s price to consider whether the stock appears rich or cheap, all inside Simply Wall St’s Community page where Narratives update automatically as new news or earnings arrive. This is why some investors currently frame Moderna around a very optimistic story with a fair value around US$175.00, while others use a more cautious story closer to US$12.00, or a consensus-style view around US$46.10.

For Moderna however we'll make it really easy for you with previews of two leading Moderna Narratives:

Fair value: US$175.00 per share

Implied discount to this fair value: about 73% relative to the recent US$46.71 share price

Revenue growth assumption: 48.43%

• Sees Moderna as having a strong balance sheet, low debt and a valuation that is low relative to its assets, including the stock trading below book value.
• Frames recent COVID 19 revenue pullback and share price weakness as a potential overreaction, with the company in a transition period while earlier mRNA investments work through trials.
• Highlights a broad pipeline of products that could support future growth, positioning the stock as a comparatively lower risk way to get biotech exposure if that pipeline delivers.

Fair value: US$46.10 per share

Implied premium to this fair value: about 1% relative to the recent US$46.71 share price

Revenue growth assumption: 17.91%

• Views the expanding mRNA pipeline, regulatory engagement and cost cuts as positives, but sees these largely reflected in current expectations.
• Flags risks around vaccine demand, competition, pricing, cost reductions and regulatory scrutiny, which could affect revenue stability and future earnings.
• Notes that the analyst consensus price target sits close to the current share price, so on this view Moderna screens as roughly fairly priced with limited implied upside from here.

If you want to go beyond the previews and see how other investors are tying these stories together with their own numbers, See what the community is saying about Moderna.

Do you think there's more to the story for Moderna? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.