Did Moderna's Q4 Earnings Beat Outweigh the Flu Vaccine Setback

Key Takeaways

• Moderna’s Q4 2025 earnings beat analyst expectations on both revenue and EPS, driven by strong cost control and better-than-anticipated COVID vaccine sales.
• The FDA’s refusal-to-file letter for Moderna’s seasonal flu vaccine (mRNA-1010) introduces significant regulatory uncertainty and jeopardizes the company’s 2028 breakeven target.
• Despite the regulatory setback, Moderna reiterated its guidance for up to 10% revenue growth in 2026, fueled by international expansion and its existing COVID vaccine, mNEXSPIKE.

Did Moderna's Q4 Earnings Beat Outweigh the Flu Vaccine Setback?

Moderna (NASDAQ: MRNA) delivered a mixed bag for investors in its latest earnings report, with a strong fourth-quarter financial performance overshadowed by a significant regulatory setback. The company reported fourth-quarter revenue of $678 million, comfortably beating analyst estimates ranging from $626 million to $663 million. This revenue was primarily driven by COVID vaccine sales, landing at the higher end of the company's own expectations.

The beat extended to the bottom line, with a GAAP net loss of $(0.8) billion** and a GAAP EPS of **$(2.11), which was a narrower loss than the Street's consensus of $(2.59)** to **$(2.79). For the full fiscal year 2025, Moderna reported total revenue of $1.9 billion, a 40% decrease from 2024, alongside a net loss of $2.8 billion or $(7.26)** per share. Management highlighted aggressive cost-cutting measures, reducing annual operating expenses by approximately **$2.2 billion in 2025, significantly surpassing their targets.

However, the positive financial news arrived just days after the U.S. Food and Drug Administration (FDA) issued a refusal-to-file (RTF) letter for Moderna's investigational seasonal influenza vaccine, mRNA-1010. The FDA cited the choice of a standard-dose seasonal influenza vaccine as a comparator in the pivotal Phase 3 trial as the sole reason for the refusal, not concerns over safety or efficacy. This unexpected regulatory hurdle immediately cast a shadow over the earnings beat, raising questions about Moderna's near-term diversification strategy.

The market's initial reaction reflected this tension. MRNA shares popped +5.29% to $42.23 on the day of the earnings report, indicating that the better-than-expected financials provided a much-needed boost. Yet, the stock's overall trajectory and the analyst sentiment remain cautious, suggesting that the FDA setback is a more significant long-term concern than the quarterly beat alone. Investors are now grappling with how this regulatory roadblock will impact Moderna's ambitious plans to expand beyond its COVID-19 vaccine franchise.

What Are the Financial Implications of Moderna's Regulatory Roadblock?

The FDA's refusal-to-file (RTF) letter for mRNA-1010, Moderna's seasonal flu vaccine candidate, carries substantial financial implications, particularly for the company's long-term profitability roadmap. While the immediate impact on 2026 revenue guidance is minimal, as the flu vaccine was not expected to contribute significantly until 2027 or 2028, the setback directly threatens Moderna's target of achieving cash breakeven by 2028. Analysts at William Blair, for instance, had modeled peak U.S. mRNA-1010 sales of greater than $1 billion in a roughly $5 billion annual market, making it a critical component of future revenue diversification.

This regulatory delay means Moderna must now fund its extensive pipeline at a high expense without the anticipated near-term commercial product. For 2026, the company projects research and development (R&D) expenses of approximately $3.0 billion and selling, general, and administrative (SG&A) expenses of about $1.0 billion. These are substantial outlays, and while Moderna ended 2025 with a robust $8.1 billion in cash and investments, the continued cash burn without new revenue streams puts pressure on its liquidity runway. The company projects year-end cash and investments for 2026 to be between $5.5 billion and $6.0 billion, indicating a significant draw on reserves.

The RTF also has a ripple effect on other pipeline assets, most notably mRNA-1083, the combination flu and COVID vaccine. Moderna had paused development of mRNA-1083 until mRNA-1010 was approved, hoping the flu vaccine's success would bolster the case for the combination shot. The current uncertainty surrounding mRNA-1010's U.S. approval now complicates the path for mRNA-1083, which was also expected to be a meaningful contributor to revenue growth and the return to profitability.

Furthermore, the FDA's decision, citing the "best-available standard of care" for comparator vaccines, introduces a degree of regulatory ambiguity that could affect Moderna's broader mRNA vaccine pipeline. If the FDA demands different comparators or trial designs for future submissions, it could necessitate costly and time-consuming adjustments to ongoing or planned studies. This uncertainty could deter investment across the vaccine sector, as the goalposts for regulatory approval appear to be shifting, creating a more challenging environment for innovation.

How Does Moderna Plan to Achieve Growth Amidst Challenges?

Despite the significant regulatory hurdle for its flu vaccine, Moderna remains committed to its growth trajectory, reiterating its plan to deliver up to 10% revenue growth in 2026. This ambitious target, from a 2025 base of $1.9 billion, is predicated on several key pillars that aim to diversify revenue streams and enhance commercial execution, particularly outside the U.S. The company expects the 2026 revenue split to be approximately 50% U.S. and 50% international, highlighting a strategic shift towards global markets.

A primary driver of this projected growth is the continued expansion of mNEXSPIKE, Moderna's COVID-19 vaccine. While overall COVID vaccine sales have declined from pandemic peaks, mNEXSPIKE has demonstrated strong commercial momentum, capturing approximately 24% of the total U.S. retail COVID vaccine market and an impressive 34% share among adults aged 65 and older. The company anticipates further growth through international approvals and launches of mNEXSPIKE in key markets like Europe, Japan, and Taiwan, which were approved mid-year in 2025 and are now becoming commercially available.

International strategic partnerships and local manufacturing capabilities are also central to Moderna's 2026 growth strategy. The company announced new multi-year commercial agreements with Mexico and Recordati, alongside existing partnerships in the U.K., Canada, and Australia. These agreements, coupled with the activation of three new international manufacturing sites in 2025, are expected to drive significant revenue contributions from ex-U.S. geographies. The flu vaccine (mRNA-1010) itself is still under regulatory review in Europe, Canada, and Australia, with potential approvals projected for late 2026 or early 2027 in these regions, offering a path to international revenue even if the U.S. market remains stalled.

Furthermore, Moderna's robust pipeline continues to advance, with several late-stage clinical readouts anticipated in 2026 that could serve as future growth catalysts. The company reported positive five-year Phase 2 data in adjuvant melanoma for its individualized cancer therapy (INT) program, showing an "approximately 50% reduction in the rates of relapse or death." Three late-stage studies for INT are fully enrolled across adjuvant melanoma, renal cell carcinoma, and muscle-invasive bladder cancer. Additionally, Phase 3 studies for its norovirus vaccine and propionic acidemia (PA) registrational study are fully enrolled, with key data readouts expected this year, signaling diversification beyond respiratory vaccines.

What Are the Key Risks and Opportunities for MRNA Investors?

For MRNA investors, the current landscape presents a complex interplay of significant risks and potential opportunities. The most immediate risk stems from the FDA's refusal-to-file (RTF) letter for mRNA-1010. This regulatory hurdle not only delays a crucial diversification product but also introduces uncertainty into the approval pathway for other mRNA vaccines, including the combination flu/COVID shot (mRNA-1083). The potential for a prolonged regulatory standoff or the need for additional, costly trials could further push back revenue contributions and strain Moderna's cash reserves, impacting its 2028 breakeven target.

Another substantial risk is the ongoing decline in COVID-19 vaccine sales. While mNEXSPIKE has performed better than expected, the overall market for COVID vaccines is shrinking, and Moderna's full-year 2025 revenue of $1.9 billion already reflects a 40% year-over-year decrease. The company's ability to maintain or grow its market share in a competitive and diminishing market will be critical. Furthermore, the high R&D expenses, projected at $3.0 billion for 2026, represent a significant cash burn that must be offset by future product approvals and commercial success.

On the opportunity side, Moderna's deep and diversified pipeline remains a compelling long-term story. The positive five-year Phase 2 data for its individualized cancer therapy (INT) in adjuvant melanoma, with three late-stage studies fully enrolled, highlights the potential of mRNA technology beyond infectious diseases. Success in these oncology programs, or in other late-stage candidates like the norovirus vaccine or propionic acidemia treatment, could unlock substantial new revenue streams and fundamentally shift Moderna's valuation from a "COVID vaccine company" to a broad mRNA therapeutics platform.

International expansion also presents a significant opportunity. With mRNA-1010 and mRNA-1083 still under review in Europe, Canada, and Australia, and mNEXSPIKE launching in new markets, Moderna is actively pursuing revenue growth outside the U.S. These ex-U.S. approvals could provide a crucial bridge to profitability, even if the U.S. regulatory environment remains challenging. The company's strong cash position, with $8.1 billion in cash and investments at the end of 2025, provides a substantial runway to fund its pipeline and navigate these regulatory and commercial headwinds.

What Does This Mean for MRNA's Valuation and Analyst Sentiment?

Moderna's valuation currently reflects a company in transition, grappling with the shift from pandemic-era highs to a more normalized, yet uncertain, commercial landscape. The stock's current market capitalization stands at $16.50 billion, with a negative P/E ratio of -5.87 and a P/S ratio of 8.49, indicating that investors are pricing in future growth potential rather than current profitability. The 52-week range of $22.28 to $55.20 highlights the volatility and investor indecision surrounding its prospects.

Analyst sentiment, as reflected by Wall Street consensus, is largely "Hold," with 14 out of 27 analysts recommending this rating. While 9 analysts have a "Buy" rating, 4 recommend "Sell," indicating a divided view on the stock's near-term trajectory. The consensus price target is $30.00, with a median of $28.00, suggesting a potential downside from the current price of $42.23. This conservative outlook underscores the market's concern about the FDA setback and the long path to profitability.

The forward estimates further illustrate the challenge. Analysts project revenue of $5.2 billion for FY 2029 and $6.9 billion for FY 2030, with EPS estimates of $0.05 and $3.03 respectively. These projections indicate that a return to significant profitability is still several years away, heavily reliant on successful pipeline execution and regulatory approvals. The current negative TTM EPS of $(7.20) and negative operating margin of -158.2% underscore the company's reliance on future commercial successes to justify its current valuation.

Ultimately, Moderna's valuation will hinge on its ability to resolve the regulatory issues with its flu vaccine, successfully advance its oncology and rare disease pipelines, and effectively commercialize new products globally. The market is keenly watching for the outcome of Moderna's requested Type A meeting with the FDA, which will be a critical catalyst in determining the path forward for mRNA-1010 and, by extension, the broader mRNA vaccine franchise. Until there is greater clarity on these fronts, MRNA is likely to remain a speculative play, with its valuation sensitive to every regulatory update and clinical trial readout.

Moderna stands at a critical juncture, balancing strong operational execution and a robust pipeline against significant regulatory headwinds. The coming quarters will be crucial in determining if the company can successfully diversify beyond its COVID-19 vaccine and achieve its ambitious profitability targets. Investors should closely monitor the FDA's response to Moderna's flu vaccine appeal and the progress of its late-stage clinical trials for signs of a clear path forward.

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