Why Pfizer’s Steady Growth May Be a Thing of the Past

Pharmaceutical company Pfizer became a household name during the COVID-19 pandemic, when its novel mRNA vaccine became one of the two main options for those seeking protection from the virus. The company soon followed up with Paxlovid, the main recommended treatment for people who caught COVID-19. These back-to-back successes sent Pfizer’s stock soaring, and many analysts believed that the growth would last. However, as the pandemic waned, Pfizer’s fortunes changed.

A Reputation in Danger

COVID-19 is still with us, and public health experts continue to recommend regular booster shots to address new variants. Paxlovid also remains an important tool in the fight against the virus. But the pandemic phase is long over, and Pfizer has had to pivot to focus more on its other revenue streams. At the same time, some of its patents for well-known drugs, including Eliquis, will end their exclusivity periods soon.

It’s not that Pfizer isn’t doing anything. On the contrary, the company continues to perform cutting-edge research, while simultaneously focusing on acquisitions. But it hasn’t yet hit on another breakout drug to jumpstart its growth trajectory.

Time to Cut and Run?

Analysts are starting to get nervous that Pfizer may not have any new tricks up its sleeve. Its stock is down by 27% over the past five years, and the company is in the middle of a bold cost-cutting plan that is proving to be expensive in the short term. Contrarian long-term investors may want to consider buying now, while its stock is trading at a price-to-earnings-growth ratio of 1, with the expectation of better long-term performance. But short-term investors and those who are more risk-averse may want to pass for now, since it’s likely to be a bumpy ride over the next several years.

Lisa Fritscher has no positions in any of the stocks mentioned. Stocks.News has positions in Pfizer.