Pfizer | Fundamental Analysis | Must Read ⚡️Pfizer has grown an authority at being first. The pharmaceutical behemoth was the pioneer to introduce a coronavirus vaccine a year ago. Since then, it has had several other successes: bringing the COVID-19 booster to market, getting approval for its vaccine for adolescents, and most recently getting approval for a vaccine for children.
This has been followed by a lot of revenue. Moreover, the company recently raised its revenue forecast for coronavirus vaccines this year to $36 billion. Pfizer also raised its total revenue forecast to at least $81 billion as demand for the company's other drugs grows as well.
At the same time, the company's stock is up about 18% this year. So now the big question is: Is it too late to buy Pfizer stock?
First, let's look at Pfizer's performance now and what may lie ahead. Last week, Pfizer reported a 134 percent increase in third-quarter revenue to $24.1 billion. That includes sales of the coronavirus vaccine.
It's impossible to say exactly how much sales of this drug will grow after the pandemic, but it looks like sales of the vaccine could remain at the "best-seller" level for a long time to come. Experts say the virus will persist into the future, so we need protection - and that means regular vaccinations. As recent studies have shown, immunity declines a few months after the initial vaccination.
Let's take a look at what Pfizer itself says about future vaccine revenues. During its earnings report, the company said that some projections of vaccine revenue for 2022 look "very high," and offered more moderate projections. Pfizer projected vaccine revenue for 2022 at $29 billion, based on the delivery of 1.7 billion doses.
That's still a pretty impressive level. And that figure could be higher. Pfizer can produce 4 billion doses, and the company is still negotiating with governments.
Meanwhile, two elements are helping Pfizer continue to gain market share for coronavirus vaccines: the booster and the use of the vaccine in children and adolescents. The company is just getting started in these areas, so they clearly can help boost orders as countries plan the number of doses needed for next year and beyond.
The competitor's Moderna vaccine is not yet available for teens and children in the U.S. This means that Pfizer has an opportunity to dominate these age groups.
At the same time, Pfizer is moving closer to conquering another COVID-19 market: the treatment market. The company's investigational coronavirus pill is currently in late-stage clinical trials. The company says trial data could be available as early as this quarter. The potential pill could be a game-changer because it could be prescribed immediately after a person is diagnosed with COVID-19 and could be taken at home.
Competing company Merck, however, maybe first on the market with a potential pill treatment. It has already requested approval for its drug. But given the need for such a drug, both companies could generate billions of dollars in revenue in this area.
Analysts talk a lot about coronavirus. But the reality is that Pfizer has many other sources of revenue today - and potential in the future. This means that Pfizer can continue to thrive even if sales of the COVID-19 vaccine stall or decline.
The drivers of today's revenue are seven other drugs. Two of them, the blood-thinning drug Eliquis and the cardiovascular drugs Vyndaqel/Vyndamax, posted double-digit revenue growth in the third quarter. Pfizer has 94 programs in development. Of these, 29 are in phase 3 trials. This is cause for optimism about the company's ability to make up for possible declines in sales of its older drugs.
As mentioned earlier, Pfizer stock is up this year, but the stock is only trading at 10 times earnings guidance. This is a bargain, given Pfizer's near- and long-term growth prospects.
Pfizer's growing return on invested capital and free cash flow are two more reasons to be optimistic about the stock.
Pfizer is also a good bet for income-seeking investors. The company just paid its 331st consecutive quarterly dividend.
So, is it too late to buy Pfizer? Not if you're a long-term investor. Pfizer stock hasn't soared as fast as stocks of biotech companies involved in the fight against the coronavirus. And they're unlikely to do so in the future. But Pfizer has plenty of fuel for incremental earnings growth in the future - and that should lead to sustained, long-term stock price gains.
