Moderna, Inc.MRNANASDAQ

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DCF Valuation

⚠️Model Warnings

•Terminal value represents 143% of enterprise value. Valuation highly sensitive to long-term assumptions.

DCF Valuation Summary

Hold

Fair Value: $50.43 per share(market-calibrated)

-0.3%

Upside to Fair Value

Current

$50.56

Pure Model

$49.30

Fair Value

$50.43

Bull Case

$93.45

Bear Case

$23.28

Market Reality Check

Model Terminal Growth

3.00%

Market-Implied Growth

5.33%

Calibrated Growth

3.35%

Fair value uses 85% model / 15% market-implied terminal growth. Pure model: $49.30.

What's Driving This Ratingfor MRNA

↓

CapEx normalizing toward maintenance

Historical CapEx is 27.10% of revenue (heavy investment phase). Model fades this to 3.50% by Year 10, freeing up ~$3.6B in annual FCF. This is the biggest driver of long-term cash flow improvement.

↑

Margin expansion modeled

Current EBIT margin is -26.43% — below the sector mature average of 20.00%. Model expands margins as the business scales and operating leverage kicks in. Year 10 EBIT reaches $731M (4.79% margin).

→

Moderate revenue growth

Analyst consensus projects 6.16% revenue growth, fading to 3.00% by Year 10. Revenue reaches $15.3B (vs $1.9B today).

↔

Perpetuity and exit methods disagree

Perpetuity growth gives $28.65/share (15.4x terminal FCF) while exit multiple gives $69.95/share (32.1x terminal FCF). The 24x EV/EBITDA exit reflects current market multiples, while the perpetuity method with 3.00% growth is more conservative. The base case averages both methods.

🎯

Market pricing in higher long-term growth

To justify $50.56, the market implies 5.33% perpetual growth — 233bps above the model's 3.00%. This suggests the market sees additional growth catalysts (AI, new products, market expansion) not captured in analyst estimates.

✓

Strong cash flow conversion

Year 10 FCF/EBITDA conversion of 74.86% indicates efficient cash generation. FCF reaches $2.4B by Year 10 (15.95% FCF margin).

Weighted Average Cost of Capital (WACC)

Cost of Equity (CAPM)

Risk-Free Rate (Rf)4.50%

Beta (β)1.34

Market Risk Premium4.50%

*Using current implied premium (4.5% per Damodaran 2026), not historical (6.5%)

Cost of Equity (Re)10.52%

Cost of Debt

Pre-tax Cost of Debt1.14%

Tax Rate21.00%

After-tax Cost of Debt0.90%

Equity Weight (E/V)91.12%

Debt Weight (D/V)8.88%

WACC Calculation

WACC = (E/V × Re) + (D/V × Rd × (1-Tc))

WACC = (91.12% × 10.52%) + (8.88% × 0.90%)

= 9.67%

10-Year Free Cash Flow Projections(showing years 1, 3, 5, 7, 10)

Year	Year 1	Year 3	Year 5	Year 7	Year 10
Revenue	$2.1B	$3.2B	$7.0B	$11.5B	$15.3B
EBIT	-$545M	-$833M	-$1.8B	-$1.1B	$731M
Tax	-$115M	-$175M	-$387M	-$234M	$153M
NOPAT	-$431M	-$658M	-$1.5B	-$879M	$577M
+ Depreciation	$341M	$520M	$1.2B	$1.9B	$2.5B
- Capex	$559M	$688M	$1.2B	$1.3B	$534M
- Δ NWC	$35M	$193M	$570M	$659M	$130M
Free Cash Flow	-$684M	-$1.0B	-$2.0B	-$948M	$2.4B
Discount Factor	0.912	0.758	0.630	0.524	0.397
Present Value	-$624M	-$772M	-$1.3B	-$497M	$967M

FCF Formula: Free Cash Flow = NOPAT + Depreciation - Capex - Change in Net Working Capital

Terminal Value Calculation

Perpetuity Growth Method

Year 10 FCF$2.4B

Terminal Growth Rate3.00%

WACC9.67%

TV = FCF₁₀ × (1+g) / (WACC-g)

Terminal Value$37.6B

PV of Terminal Value$14.9B

Exit Multiple Method

Year 10 EBITDA$3.3B

Exit Multiple (EV/EBITDA)24.0x

TV = EBITDA₁₀ × Exit Multiple

Terminal Value$78.0B

PV of Terminal Value$31.0B

Valuation Summary

Perpetuity Growth Method

PV of Projected FCFs-$4.5B

PV of Terminal Value$14.9B

Enterprise Value$10.5B

(-) Net Debt-$679M

Equity Value$11.1B

Shares Outstanding389M

Price per Share$28.65

Exit Multiple Method

PV of Projected FCFs-$4.5B

PV of Terminal Value$31.0B

Enterprise Value$26.5B

(-) Net Debt-$679M

Equity Value$27.2B

Shares Outstanding389M

Price per Share$69.95

Pure Model Fair Value

$49.30

Average of perpetuity growth and exit multiple methods (before market calibration)

Sensitivity AnalysisPrice per Share

WACC ↓ / Growth →	2.00%	2.50%	3.00%	3.50%	4.00%
7.67%	$64.59	$67.34	$70.67	$74.81	$80.08
8.67%	$54.53	$56.33	$58.45	$60.98	$64.05
9.67%	$46.63	$47.87	$49.30	$50.96	$52.91
10.67%	$40.23	$41.11	$42.12	$43.26	$44.58
11.67%	$34.92	$35.57	$36.30	$37.12	$38.04

How to read: This table shows how the valuation changes with different WACC (discount rate) and terminal growth rate assumptions. Green = undervalued, Red = overvalued.

Scenario Analysis

Bear Case

$23.28

-54.0% vs current

• -25% vs analyst consensus
• Terminal growth: 2.5%
• Beta: 1.67

Base Case

$49.30

-2.5% vs current

• Analyst consensus
• Terminal growth: 3.0%
• Beta: 1.34

Bull Case

$93.45

84.8% vs current

• +25% vs analyst consensus
• Terminal growth: 3.5%
• Beta: 1.14

Key Assumptions & Drivers✓ Using Analyst Consensus Estimates• Healthcare Sector

Growth Assumptions (Select Years)

Year 1 Revenue Growth6.16%

Year 3 Revenue Growth26.57%

Year 5 Revenue Growth38.97%

Year 7 Revenue Growth24.58%

Year 10 Revenue Growth3.00%

Terminal Growth Rate3.00%

Margin & Efficiency

Current EBIT Margin-26.43%

Terminal EBIT Margin20.00%

Tax Rate21.00%

Historical Capex / Rev27.10%

Terminal Capex / Rev3.50%

NWC / Revenue29.13%

Key Drivers: Revenue growth, operating margin expansion, capex efficiency, and working capital management are the primary drivers of cash flow generation. Terminal value assumptions significantly impact final valuation.

Institutional-Grade Methodology

Actual Company Data: Revenue, EBIT, Capex, NWC, Tax Rate, Interest Expense, Beta

Market Assumptions: Risk-free: 4.5% (10Y), MRP: 4.5% (Damodaran 2026), Exit: 24x EV/EBITDA (Healthcare sector)

This DCF model is for informational purposes only. Projections are based on assumptions that may not materialize. Past performance does not guarantee future results. Consult a financial advisor before making investment decisions.

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