Key Points
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Moderna earned a surprise profit in the third quarter, while analysts expected a loss of more than $1 per share.
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Management raised its full-year revenue growth outlook to 15% to 25% and cut its R&D budget.
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Moderna and Merck are working toward regulatory filings for their melanoma vaccine after strong Phase 3 results.
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Moderna (NASDAQ:MRNA) has been one of 2026’s biggest stock market winners, rising nearly 720% through Thursday’s close. Most of that gain can be attributed to positive late-stage trial results for its experimental cancer vaccine. But the company’s third-quarter earnings report revealed something investors weren’t expecting. Moderna is profitable again, for the first time in years.
A surprise profit
Moderna’s revenue rose 29% year over year to $1.31 billion in the third quarter, far ahead of the roughly $890 million analysts were expecting. U.S. sales were $780 million, and international sales were $533 million. International sales of COVID vaccines were a particularly strong point.
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Moderna earned $162 million, or $0.38 per share, compared with a $200 million loss in the same quarter last year. Analysts had expected a loss of more than $1 per share, and this was Moderna’s first profitable quarter in two years. Research and development spending fell 27% to $583 million as the company continued to cut costs.
Management also raised its guidance significantly. Moderna now expects full-year revenue to grow 15% to 25%, up from its previous forecast of up to 10%, and it lowered its R&D budget to about $2.7 billion from about $2.9 billion. Moderna now expects to end the year with $8.1 billion to $8.3 billion in cash, up from its prior forecast of $4.7 billion to $5.2 billion, although that includes about $2.6 billion it raised by selling convertible notes and reflects a $950 million litigation payment.
That’s a big change for a company that investors have spent the past few years worrying about. A growing, profitable Moderna with $8 billion in cash has ample room to develop its pipeline without raising capital on unfavorable terms.
The cancer vaccine is still the big story
The main reason investors have piled into Moderna is intismeran autogene, a personalized cancer vaccine it’s developing with Merck (NYSE:MRK) for use alongside Merck’s blockbuster immunotherapy Keytruda. In a Phase 3 trial of melanoma patients, the combination reduced the risk of cancer recurrence or death by 42% compared with Keytruda alone, and cut the risk of the cancer spreading to distant parts of the body by 38%.
The stock soared 177% in a single day when Moderna first announced the results in August, but the ride hasn’t been smooth since. When detailed results leaked in October ahead of a major medical conference, the stock fell 17% in a day as investors sold the news. In Friday’s release, Moderna said it and Merck are “working toward regulatory submissions,” though it didn’t provide a specific timeline.
Finally, don’t forget that the cancer vaccine isn’t the only reason to be excited about the company’s progress in 2026. Moderna’s flu vaccine won FDA approval in August, and its combined flu and COVID-19 vaccine has been approved in Europe and Canada. The company is conducting a “limited launch” for the 2026-27 flu season, but this should ramp up nicely next year.
What could go wrong?
To be sure, there are real risks. As mentioned, much of the quarter’s strength came from international COVID-19 vaccine sales, which can be lumpy. The U.S. approval for the flu and COVID-19 combination is pending FDA guidance, and a Phase 3 norovirus vaccine trial didn’t meet the bar for early success in its interim analysis.
And after a roughly sevenfold gain this year, a lot of optimism is already baked into the stock price. Any negative news could have an amplified effect because significant future growth is now baked in.
The bottom line
Having said all that, Moderna looks like a very different company from what it was a year ago. It’s growing again, cutting costs, profitable, and has a potential blockbuster cancer treatment heading toward regulators. Investors will get more detail at Moderna’s Analyst Day on Nov. 12. For investors who can handle biotech volatility, a small position could make sense, but this is a stock that could be a good candidate for gradual averaging over time.
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Matt Frankel, CFP® 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.
