We recently compiled a list of the 10 worst-performing healthcare stocks of 2024. In this article, we'll take a look at how Moderna, Inc. (NASDAQ:MRNA) stands compared to other healthcare stocks.
The healthcare industry continues to be an important and resilient sector driven by technological advances, increasing global demand, and an aging population. ReportLinker predicts that the healthcare services industry will grow from $7.5 trillion in 2022 to $7.975 trillion in 2023. It is expected to grow at a compound annual growth rate (CAGR) of 6.3%, or $9.8 trillion, through 2027. The global healthcare market is divided into several segments such as hospitals, digital health, and healthcare services. The hospital market alone is expected to grow 4.18% annually from 2024 to 2029, reaching a market value of $5.19 trillion.
According to a report released by the World Health Organization in December 2023, global health spending in 2021 reached a record high of $9.8 trillion (10.3% of global GDP). Spending is also unevenly distributed, leaving low-income countries increasingly reliant on health care. As government spending on health care declined, foreign aid became necessary. High-income countries spend about $4,000 per person on health care, but 11% of the world's population lives in countries that spend less than $50 per person. Even if public health spending increases during the coronavirus pandemic, this trend is unlikely to continue as countries grapple with high inflation, low growth, and rising debt.
National health spending is projected to reach an estimated $4.8 trillion in 2023 and grow at an annual rate of 5.6% from 2027 to 2032, according to the Centers for Medicare and Medicaid Services (CMS).
A patient-centric, technology-driven revolution is occurring in the healthcare industry. Thanks to the epidemic, telemedicine has become widely accepted. The global market is estimated to be worth $60.15 billion in 2023 and is projected to continue growing. The genomics-driven precision medicine market, which provides personalized treatments based on genetic makeup, is expected to reach $50.2 billion by 2028. AI is also revolutionizing healthcare, with $31.5 billion in equity funding raised from 2019 to 2022 and expected to save the U.S. $360 billion annually over the next five years. The global market for remote patient monitoring (RPM), valued at $71.9 billion in 2023, is expected to continue to expand thanks to wearable technology.
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Dr Bruce Aylward, WHO Assistant Director-General for Universal Health Coverage and Lifecourse, said:
“Sustained public financing of health care is urgently needed to move towards universal health coverage. It is especially important now as the world faces the climate crisis, conflict, and other complex emergencies. “People's health and well-being must be protected by resilient health systems that can withstand these shocks.”
The most worrying aspect of the healthcare industry is the impending collapse of the US healthcare system, especially in terms of labor shortages and financial instability. The medical industry is facing a serious talent shortage crisis. It is predicted that 124,000 more physicians will be needed by 2030 and 800,000 registered nurses (RNs) will retire by 2027. The current nurse turnover rate is a staggering 24%. This shortage has led some health systems to close critical patient services such as pediatrics, psychiatry, obstetrics, and ICUs.
Despite these challenges, the United States continues to spend nearly twice as much on health care as the OECD average, with worse outcomes on average. This disparity highlights the inefficiency and unsustainability of the current system. Additionally, 58% of hospitals' bad debts are due to insureds, further straining the revenue cycle and limiting funds available for clinical services. The combination of these factors paints a bleak picture for the future of the U.S. health care system. Without significant intervention and reform, the industry risks systemic collapse, with potentially far-reaching impacts on public health and the economy.
Our methodology uses a stock screener to select stocks with market capitalizations above $10 billion and evaluate their year-to-date (YTD) returns. We then identified the worst performing companies year-to-date as of November 11 and ranked them accordingly.
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A scientist proudly displays a vaccine surrounded by vials and beakers in a modern laboratory.
YTD total return: -44.88%
Moderna, Inc. (NASDAQ:MRNA) is a biotechnology company specializing in messenger RNA (mRNA) therapeutics and vaccines. Develop synthetic mRNAs that instruct cells to produce proteins to prevent or treat disease. The company's primary focus has been on vaccines, particularly the COVID-19 vaccine, which is its first commercially approved product.
Moderna, Inc. (NASDAQ:MRNA) has faced significant challenges recently, leading to a decline in its stock price. Healthcare stocks are among the worst performing. The company announced plans to cut its research and development (R&D) budget by about 20% over the next three years, citing low sales forecasts and disappointing vaccine sales. This includes canceling five research and development programs to save $1.1 billion annually by 2027. Additionally, Moderna has provided prudent sales guidance into 2025 and aims to achieve breakeven by 2028.
Short-term headwinds include a decline in COVID-19 vaccination rates and a slow rollout of the RSV vaccine. Of the 10 new products expected by 2027, Moderna (NASDAQ:MRNA) filed for approval of three this year: a COVID-19/influenza vaccine, a next-generation COVID-19 vaccine, and a high-risk RSV vaccine. I'm planning. Adults between the ages of 18 and 59.
Despite these challenges, Wall Street remains optimistic about Moderna Inc.'s (NASDAQ:MRNA) future, particularly regarding the rollout of its RSV vaccine mRESVIA in the U.S. and positive feedback from the European Medicines Agency. The company's pipeline is also showing progress, with promising results from Phase III of its combined influenza and coronavirus vaccine, supported by recent collaborations with BARDA and Mitsubishi Tanabe Pharma.
Moderna, Inc. (NASDAQ:MRNA) expects sales to increase 40% to 50% in the third quarter of 2024 and return to growth in 2025, ending the year with approximately $9 billion in cash. I am aiming for this. The Company: Moderna continues to adapt to the evolving vaccine market through new product rollouts and partnerships.
Overall, MRNA ranks #1 on our list of worst-performing healthcare stocks for 2024. While we acknowledge MRNA's potential as an investment, we believe AI stocks have a better chance of delivering higher returns and achieving them in the short term. time frame. If you're looking for AI stocks with better prospects than MRNA, but trading at less than 5x earnings, check out our report on the cheapest AI stocks.
Read next: 8 Best Widemot Stocks to Buy Now and 30 Most Important AI Stocks, According to BlackRock
Disclosure: None. This article was originally published on Insider Monkey.
