2 Reasons to Watch PFE and 1 to Stay Cautious

Even during a down period for the markets, Pfizer has gone against the grain, climbing to $28.30. Its shares have yielded a 7.1% return over the last six months, beating the S&P 500 by 9.4%. This run-up might have investors contemplating their next move.

Following the strength, is PFE a buy right now? Or is the market overestimating its value? Find out in our full research report, it’s free.

Why Does Pfizer Spark Debate?

With roots dating back to 1849 when two German immigrants opened a fine chemicals business in Brooklyn, Pfizer (NYSE:PFE) is a global biopharmaceutical company that discovers, develops, manufactures, and sells medicines and vaccines for a wide range of diseases and conditions.

Two Positive Attributes:

1. Organic Growth Indicates Solid Core Business

Investors interested in Branded Pharmaceuticals companies should track organic revenue in addition to reported revenue. This metric gives visibility into Pfizer’s core business because it excludes one-time events such as mergers, acquisitions, and divestitures along with foreign currency fluctuations - non-fundamental factors that can manipulate the income statement.

Over the last two years, Pfizer’s organic revenue averaged 10.1% year-on-year growth. This performance was solid and shows it can expand steadily without relying on expensive (and risky) acquisitions.

2. Adjusted Operating Margin Rising, Profits Up

Adjusted operating margin is a key measure of profitability. Think of it as net income (the bottom line) excluding the impact of non-recurring expenses, taxes, and interest on debt - metrics less connected to business fundamentals.

Analyzing the trend in its profitability, Pfizer’s adjusted operating margin rose by 17.8 percentage points over the last two years, as its sales growth gave it operating leverage. Its adjusted operating margin for the trailing 12 months was 35.1%.

One Reason to be Careful:

Long-Term Revenue Growth Disappoints

Examining a company’s long-term performance can provide clues about its quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Regrettably, Pfizer’s sales grew at a mediocre 5.6% compounded annual growth rate over the last five years. This wasn’t a great result compared to the rest of the healthcare sector, but there are still things to like about Pfizer.

Final Judgment

Pfizer’s merits more than compensate for its flaws, and with its shares beating the market recently, the stock trades at 9.6× forward P/E (or $28.30 per share). Is now the time to initiate a position? See for yourself in our full research report, it’s free.

Stocks We Like Even More Than Pfizer

WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don't just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.

But our AI platform says the party isn't over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating Stocks for Free HERE.

Stocks that have made our list include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.