Is Pfizer Stock a Buy, Hold, or Sell? A Deep Dive Into Its Performance and Financials

PUBLISHED May 30, 2025, 1:37:54 PM        SHARE

img
imgjp_dividends on YouTube
Stockteamup Important!

jp_dividends on YouTube is Leading the Pack! Read on for proven investment insight!

Introduction

Today, we're taking a closer look at Pfizer (PFE) stock to determine whether it's a buy, hold, or sell. We'll break down:

  • How Pfizer makes money
  • Pfizer’s financials and dividend analysis
  • A look at valuation to determine its intrinsic value

Pfizer Stock Performance

Pfizer has had a rough ride over the past few years.

  • Year-to-date: Down 14%
  • Past 1 year: Down 27% since its peak in July
  • 5-year return: Mediocre overall, with the stock down 61% from its peak in December 2021

Clearly, Pfizer has been beaten up significantly, which raises the question—is this a buying opportunity or a warning sign?

How Pfizer Makes Money

Pfizer is a global biopharmaceutical giant generating revenue from developing, manufacturing, and selling biopharmaceutical products. These products come from sources such as organs, tissues, microorganisms, and animal fluids through biotechnological processes.

Most recently, Pfizer gained major recognition due to its COVID-19 vaccine, which spiked revenue significantly. Pfizer and Moderna were the primary vaccine providers during the pandemic, driving temporary financial gains that have since dropped off.

Competitive Challenges

Pfizer operates in a highly competitive and heavily regulated industry.

  • Before launching any pharmaceutical product, the company must invest heavily in research and development to gain regulatory approval.
  • Competition is fierce, with major rivals such as Merck, Moderna, Johnson & Johnson, and Gilead Sciences.

Despite being a long-established pharmaceutical leader, Pfizer faces challenges in sustaining strong growth in this landscape.

Pfizer Financials

Revenue

Pfizer’s revenue trend is flat over the years:

  • 2010 revenue: $65 billion
  • 2024 revenue (TTM): $63 billion

The company saw a huge spike due to COVID-19, reaching $101 billion in 2022, but since then, revenue has fallen significantly. Although the past few quarters show some recovery, the long-term trend is not promising.

Net Income

Net income follows a similar flat trajectory:

  • 2011: $8.4 billion
  • 2024: $8 billion

Despite short-term COVID-driven momentum, Pfizer has not demonstrated strong growth in profitability over the years.

Free Cash Flow

This is where things start to look alarming. Pfizer's free cash flow has been on a declining trend:

  • 2011: $18 billion
  • 2024: $9 billion

That’s a 50% drop in free cash flow—a critical financial metric for determining future business sustainability.

Financial Metrics

When analyzing Pfizer, it's crucial to examine key financial indicators:

  • PE Ratio: 16 – A low valuation, which aligns with its lack of strong growth.
  • Net Profit Margin: 12.6% – Solid profitability, though not exceptional.
  • ROA (Return on Assets): 4.6% – Slightly below the preferred 5%+ mark.
  • ROE (Return on Equity): Below 15% – Not meeting the ideal threshold for strong returns.

While Pfizer's profitability metrics are decent, they don’t indicate explosive growth. The business remains stable but lacks upward momentum, which is a concern for long-term investors.

Pfizer’s Dividend: High Yield, But Is It Safe?

One of Pfizer’s most appealing features is its dividend yield, which has climbed to 8% due to the stock’s recent decline. This is high for a non-REIT or non-BDC company, making it attractive for income-focused investors.

Here’s a breakdown of Pfizer’s dividend stats:

  • Payout Ratio: 54% – A manageable level.
  • 5-Year Dividend Growth Rate: 4% – Modest, but consistent.
  • Dividend Growth History: 14 years – A reliable track record.

Is the Dividend at Risk?

While Pfizer has a solid dividend history, concerns arise due to its shrinking free cash flow.

  • Cash Flow Payout Ratio: Ideally 20%-40% for safety; Pfizer sits at 60%, which is acceptable but concerning.
  • Red Flag: If free cash flow continues declining, dividend sustainability could become problematic.

With free cash flow dropping from $18 billion to $9 billion, further declines could put the dividend in jeopardy, especially as Pfizer allocates capital to R&D, debt repayment, and acquisitions.

Valuation: Is Pfizer Undervalued?

Pfizer is currently trading at $23 per share, but valuation models suggest significant upside:

  • Discounted Cash Flow (DCF) Model: $33 per share
  • Simply Wall Street Estimate: $71 per share
  • Average Fair Price Estimate: $52 per share (128% upside)

While Simply Wall Street is very bullish, its assumptions about future cash flow growth may be overly optimistic. Pfizer’s volatile cash flow over recent years makes valuation estimates tricky.

Final Verdict: Should You Buy Pfizer Stock?

Reasons to Avoid Pfizer:

  • Highly Regulated Industry: Heavy R&D and approval costs limit growth potential.
  • COVID Momentum Fizzled Out: Revenue and net income remain flat post-pandemic.
  • Shrinking Free Cash Flow: A long-term risk, potentially threatening dividend stability.
  • Dividend Growth Rate is Low: At 4-5%, Pfizer’s dividend growth isn’t impressive.

Potential Upside?

  • Valuation Indicates Possible Undervaluation: If Pfizer stabilizes free cash flow, it could have upside potential.
  • Dividend Yield is Attractive: At 7-8%, some investors may see a buying opportunity.

My Take?

Pfizer is not a buy right now. The combination of flat growth, industry challenges, and free cash flow concerns makes it too risky for my liking. While some may see value in the high yield, I’d rather wait for a stronger financial outlook before considering an investment.

What’s Your Take?

Do you think Pfizer is a buy, hold, or sell? Comment down below! If you found this analysis helpful, drop a like and hit subscribe for more stock breakdowns!

More Stocks Like Pfizer

Here’s a markdown table with five stocks similar to Pfizer, including links to their investor relations pages and stock symbols:

Company Name Symbol Description
Johnson & Johnson JNJ A global healthcare giant specializing in pharmaceuticals, medical devices, and consumer health products.
AbbVie ABBV A biopharmaceutical company known for its immunology and oncology treatments, including Humira.
Merck & Co. MRK A leading pharmaceutical company focused on vaccines, oncology, and infectious disease treatments.
Bristol-Myers Squibb BMY A pharmaceutical company specializing in cancer, cardiovascular, and immunology therapies.
Zoetis ZTS A global leader in animal health, providing medicines and vaccines for livestock and pets.

https://youtu.be/A7cao0On7ww?si=y6BZn1Q9_g7CYSx1



Sound investments
don't happen alone

Find your crew, build teams, compete in VS MODE, and identify investment trends in our evergrowing investment ecosystem. You aren't on an island anymore, and our community is here to help you make informed decisions in a complex world.

More Reads
What Are Examples of Advanced Materials?
Image

In this guide, we'll explore the cutting-edge world of advanced materials, uncovering their incredible properties and how they’re driving scientific breakthroughs.

Which Company Owns the Largest Rare Earth Mine in the U.S.
Image

MP Materials owns the largest, rare earth mine in the U.S., the Mountain Pass Rare Earth Mine in California.

What Is the Best Rare Earth ETF?
Image

In this guide, we'll rank the top rare earth ETFs. Then we’ll break down the rare earth ETF landscape, highlight what makes a fund worth your dollars, and explore how these investments align with a broader strategy built on durability and foresight—just as any wise investor should approach their portfolio.

Top Gold ETFs with Dividends
Image

Dividend-paying gold ETFs are an intriguing hybrid—offering exposure to gold’s defensive qualities while providing steady income streams for investors. Traditionally, gold is seen as a hedge against inflation, currency devaluation, and economic uncertainty, but it lacks the ability to generate cash flow. Gold ETFs that distribute dividends address this limitation by incorporating holdings in **gold miners, royalty firms, and income-generating assets**, making them a compelling addition to diversified portfolios.

Does Barrick Gold Corp Pay a Dividend? A Comprehensive Guide for Investors
Image

When evaluating gold stocks, dividends can be a game-changer for investors seeking both stability and income. Barrick Gold Corporation (NYSE: GOLD), one of the world's leading gold miners, has long been a focal point for dividend-focused portfolios. But how does Barrick Gold stack up in the world of precious metal dividends?

Is Netflix a Mega-Cap
Image

Netflix has transformed the entertainment landscape, pioneering the subscription-based streaming model and reshaping how audiences consume content. This article explores Netflix’s current market valuation, compares it to established mega-cap stocks, and assesses whether it meets the criteria for this prestigious classification.

Is Amazon a Mega-Cap?
Image

In the world of investing, companies are often classified by their market capitalization, a measure of their total value in the stock market. At the highest tier are mega-cap stocks-corporations with market capitalizations typically exceeding $200 billion. This article explores whether Amazon qualifies as a mega-cap stock.

Is Apple a Mega-Cap?
Image

Market capitalization measures the total value of a company's outstanding shares, reflecting its financial strength and market influence. Mega-cap stocks, typically valued at over $200 billion, represent the largest and most established firms in the global economy. Apple, consistently ranking among the world's most valuable companies, exemplifies the characteristics of a mega-cap stock.

Is Walmart a Mega Cap Stock?
Image

Mega cap stocks are companies with exceptionally high market capitalizations, typically exceeding $200 billion. These corporations play a vital role in financial markets, influencing economic trends and investor sentiment. Walmart, a global retail giant, has consistently maintained a market capitalization that places it among the largest publicly traded companies.

Is Microsoft a Mega Cap Stock?
Image

Mega cap stocks refer to companies with exceptionally high market capitalizations, typically exceeding $200 billion. These corporations play a crucial role in financial markets, often serving as economic indicators due to their influence on industry trends and investor sentiment. Microsoft, with a market capitalization well into the trillions, firmly qualifies as a mega cap stock.

CVS Stock Upsurge- Strategic or Risky?
Image

Founded in 1963, CVS Health Corp provides high-quality, affordable and accessible health care through innovative means. It has its operations primarily in the United States, in all the 50 states, the District of Columbia and Puerto Rico.

Procter & Gamble Stock: Accurately Valued or Overpriced in 2025?
Image

Headquartered in Cincinnati in Ohio, Procter & Gamble Co. is a leading global multinational consumer goods company which was founded in 1837. Its businesses range across fabric & homecare, baby, feminine & family care, grooming, beauty, healthcare and P&G chemicals.

Microsoft Stock Analysis 2025: Buy, Hold or Sell?
Image

Founded in 1975 by Bill Gates and Paul Allen, Microsoft is a multinational technology corporation which is headquartered in Redmond, Washington. It is regarded as one of the globally leading software makers. According to data from March 2025, Microsoft holds the third position globally, just behind Apple and Nvidia, and a market cap of $2.95 trillion.

UPS Stock Analysis- Strategy and Challenges
Image

The company was established in Seattle in 1907 by an enterprising 19-year-old named James E. Casey and Claude Ryan. Its headquarter is in Atlanta, Georgia and its business segments cater to U.S. domestic, international and supply chain solutions.

What Makes Apple Inc. (AAPL) a Bullish Stock in 2025?
Image

Established in 1976 by Steve Jobs, Steve Wozniak and Ronald Wayne, Apple Inc. is a brand that is synonymous with innovation and efficiency. Its headquarters, famously known as Apple Park, is located in Cupertino, California.

Adobe, Inc. Stock Analysis for FY2025 Q1 and Beyond
Image

Headquartered in San Jose, California, Adobe, Inc. was established in 1982 by John Warnock and Charles Geschke. Its business segments comprise digital media, digital experience and publishing and advertising.

Alibaba Stock Analysis
Image

Alibaba Group Holding Limited was established in 1999 by Jack Ma in Hangzhou, China. Its businesses are in retail, cloud intelligence, logistics, local consumer services, technology infrastructure and digital media and entertainment. A multinational technology conglomerate, Alibaba is one of the leading global companies in online retail.

Strong Forecast for Capital One Financial Corporation (COF)
Image

Capital One Financial Corporation is an American bank holding company which was founded in 1994. It is headquartered in McLean, Virginia and has businesses primarily in credit cards and consumer and commercial banking.

Sanofi- A Good Bet or Risk-Sensitive?
Image

Sanofi S.A. is a French multinational pharmaceutical and healthcare company which was established in 1973. Headquartered in Paris, its core businesses span across pharmaceuticals, vaccines and consumer healthcare.

Will Citigroup Stock Soar Amid its Strategic Overhaul?
Image

In 1988, Citigroup Inc was founded through the merger of Citicorp (a holding company) and Travelers Group, Inc. Its legacy of 210 years spans across its financial and social avenues. It has a widespread global presence in about 180 countries. Citigroup businesses are in services, markets, banking and international, wealth and U.S. personal banking.

Resources for Publishers
Resources for New Investors
Boosted with BossCoin
Top Investors
user_profile
Tom Hamilton
user_profile
Wise Intelligent
user_profile
Mark Robertson
user_profile
Kevin Matthews II
user_profile
Akeiva Ellis
user_profile
Brendan Dale
user_profile
Kenneth Chavis IV
user_profile
Sharita Humphrey