Pfizer Inc. (PFE - Get Rating) is a well-known developer and distributor of biopharmaceutical products like medicines, vaccines, and other therapies. The company developed the Pfizer-BioNTech COVID-19 vaccine with BioNTech SE (BNTX).

On June 29, PFE and BNTX announced their new agreement with the U.S. government to provide 105 million doses of the COVID-19 vaccine, which might include adult Omicron-adapted COVID-19 vaccines. The government is expected to pay $3.20 billion upon receipt of the doses and has the option to purchase up to 195 million additional doses. The doses are expected to be delivered in late summer and continue into the fourth quarter.

PFE’s stock has gained 23.8% over the past year and 9.2% over the past month to close its last trading session at $50.82. However, it is down 13.9% year-to-date.

Here are the factors that could affect PFE’s performance in the near term:

Solid Bottom Line

For the fiscal first quarter of 2022, PFE’s revenues increased 76.8% year-over-year to $25.66 billion. Non-GAAP adjusted net income attributable to PFE common stockholders improved 74.5% from the same period the prior year to $9.34 billion, while non-GAAP adjusted earnings per common share attributable to PFE stockholders came in at $1.62, up 70.5% from the prior-year period.

Cheap Valuations

In terms of its forward P/E, PFE is trading at 8.48x, 67.7% lower than the industry average of 26.23x. The stock’s forward EV/EBITDA multiple of 6.29 is 53.1% lower than the industry average of 13.43. In terms of its forward EV/EBIT, it is trading at 6.98x, 58.9% lower than the industry average of 16.98x.

Wide Profit Margins

PFE’s trailing-12-month EBIT margin and EBITDA margin of 34.66% and 40.15% are 2,622.3% and 838% higher than their respective industry averages of 1.27% and 4.28%. Its trailing-12-month net income margin of 27.01% is substantially higher than the industry average of a negative 1.93%.

The stock’s trailing-12-month ROE, ROTC, and ROA of 33.65%, 17.59%, and 13.58% compare to their respective industry averages of a negative 36.02%, 19.74%, and 27.22%.

POWR Ratings Reflect Promising Prospects

PFE’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of A, which equates to a Strong Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.

PFE has a Value grade of A in sync with its low valuations. It also has a Growth and Quality grade of B, consistent with its solid bottom line growth in the last reported quarter and its wide profit margins.

In the 167-stock Medical – Pharmaceuticals industry, it is ranked #4.

Click here to see the additional POWR Ratings for PFE (Momentum, Stability, and Sentiment).

View all the top stocks in the Medical – Pharmaceuticals industry here.

Bottom Line

PFE has been a major beneficiary of the pandemic and continues to benefit from its vaccine rollouts. Moreover, the company possesses a solid bottom line and wide profit margins. And with analysts expecting continued growth in the near term, I think the stock might be a solid buy.

How Does Pfizer Inc. (PFE) Stack Up Against its Peers?

While PFE has an overall POWR Rating of A, one might consider looking at its industry peers, Merck & Co., Inc. (MRK - Get Rating) and Novo Nordisk A/S (NVO - Get Rating), which have an overall A (Strong Buy) rating.

PFE shares were trading at $50.86 per share on Thursday afternoon, up $0.04 (+0.08%). Year-to-date, PFE has declined -12.51%, versus a -15.73% rise in the benchmark S&P 500 index during the same period.

About the Author: Anushka Dutta

Anushka is an analyst whose interest in understanding the impact of broader economic changes on financial markets motivated her to pursue a career in investment research. More...

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