Pfizer (PFE -0.03%) is a company that’s in the midst of a transition. The COVID-19 vaccine maker benefited from a huge revenue boost due to the pandemic. Now, however, as the government is no longer stockpiling vaccines and it will be the commercial market that buys them, demand will be much lighter. On top of that, Pfizer is also dealing with multiple drugs losing patent protection in the near future, exacerbating concerns about its growth potential.

With so many moving parts, it can be difficult to predict how everything will play out and where Pfizer will be in the future. Below, I’ll look at how the business might look five years from now, and whether that makes it a stock worth buying today.

No longer a COVID-19 stock

One thing I’m not expecting to be a big revenue driver for the business is COVID-19. Even if there is an uptick in case numbers, unless it is truly devastating, demand likely won’t be strong for Pfizer’s COVID-19 vaccine or booster shots in the future. This year, Pfizer projects the COVID-19 vaccination rate in the U.S. to be just 24%. In the future, that rate is likely to decline even further as COVID-19 becomes even less of a concern.

And you can already see from the strong travel demand this year, people are eager to put the pandemic behind them. While an uptick in cases could change that, Pfizer is preparing to cut back on spending related to COVID-19 as it recognizes the reality that demand may deteriorate even more.

Through the first six months of this year, Pfizer’s revenue of $31 billion was down 42% year over year — largely due to a drop in COVID-19 revenue. Sales of its vaccine (Comirnaty) and pill (Paxlovid) have declined by 79% and 56%, respectively. As bad as those numbers are, I wouldn’t be surprised if they fell even further over the next five years.

Investors should expect a broader business

Pfizer CEO Albert Bourla has been working on bolstering the company’s growth prospects to not only offset a decline in COVID-19 cases, but revenue declines that are due to happen as patent protections expire on some of its key drugs this decade, including blood clot medication Eliquis. Bourla’s goal is to add $25 billion in new revenue before the end of the decade.

The company plans to acquire cancer company Seagen for $43 billion, which is part of that strategy. There have also been other smaller acquisitions Pfizer has completed within the past few years, including of Biohaven Pharmaceuticals, Global Blood Therapeutics, ReViral, Arena Pharmaceuticals, and others.

There could, however, be a greater need for more mergers and acquisitions (M&A), especially if COVID-19 revenue isn’t all that strong. That’s why I expect the company to continue to be aggressive in pursuing deals. And as that happens and Pfizer acquires more drugs, its business is likely to become more diverse.

One opportunity I think it’ll end up pursuing aggressively is weight loss. It has a weight-loss medication, danuglipron, in the works that has been demonstrating encouraging results thus far, comparable to that of Novo Nordisk‘s popular diabetes drug, Ozempic (which people use for weight loss even though it isn’t approved for that indication). If Pfizer is unsuccessful in bringing a weight-loss drug to market, that could be an area where M&A can be a good option.

The end result should be that in five years from now, Pfizer is not dependent on COVID-19 revenue and its overall business is much more diverse, with oncology, weight loss, and perhaps other types of drugs playing key roles in the company’s future growth.

Should you invest in Pfizer today?

Investing in a business that’s in the midst of such a large transition can be risky because you’re not sure how it may play out. Pfizer is trading at its 52-week low, so investors clearly don’t have much confidence in its business right now. At only 10 times its estimated future earnings, it’s also trading at a steep discount — the average healthcare stock trades at a multiple of 18.

Pfizer is trading like its business is broken, when it isn’t by any means. While there are valid concerns about its loss of patent protection on key drugs, that doesn’t mean the business is doomed. The company is at least doing the right things and investing in its growth through both its pipeline and acquisitions.

By and large, investors appear to be overly bearish on the stock, and that makes Pfizer an intriguing investment opportunity right now. If you’re willing to buy and hold while the business evolves and diversifies its operations, the stock could pay off significantly in the long run.

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