To The Moon

$Pfizer(PFE)$  Pfizer: Down 19%

Pfizer has been a big name in healthcare for decades, but it has been a largely underwhelming investment over the past 10 years, falling by more than 19% during that time frame. The company has been dealing with patent expirations and needing to innovate to continue growing.

Things were looking good a few years ago when its COVID vaccine and pill resulted in its business achieving record numbers, with sales topping more than $101 billion in 2022. But with that no longer being a key growth catalyst for the business anymore and Pfizer now also worrying about government cutbacks on healthcare spending, investors haven't been eager to buy the stock, even despite its modest 18 times earnings multiple or its high yield of more than 7%.

There is, however, still hope for Pfizer to turn things around, as the healthcare company has been cutting costs, and it's in the early innings of many acquisitions, including oncology company Seagen, which it acquired in 2023.

NYSE" fifty_two_week_high="31.54" fifty_two_week_low="20.91" gross_margin="66.93" logo="https://g.foolcdn.com/art/companylogos/mark/PFE.png" market_cap="$143B" pe_ratio="18.29" percent_change="-0.61" symbol="PFE" volume="1,784">

What investors can learn from Pfizer's uninspiring performance over the past decade is to not get too caught up in market conditions that may only be temporary -- such as a pandemic. Buying at the time when Pfizer's valuation was rising due to strong COVID-related sales would have resulted in deeper stock losses today.

I think Pfizer can still make for an underrated buy, especially given its low price tag, as investors may be overly punitive on the business for factors out of its control -- uncertainty around healthcare spending, a declining COVID market, etc. But buying the stock will definitely require patience, as a rally may not be coming soon.