Better Beaten-Down Stock to Buy: Pfizer Vs. Moderna

In 2020, many companies tried to develop effective coronavirus vaccines, but two ended up succeeding and dominating the field: Pfizer (NYSE: PFE) and Moderna (NASDAQ: MRNA). These two vaccine makers made small fortunes thanks to their work in this space.

However, Pfizer and Moderna's revenue and earnings dropped significantly once the pandemic receded, as did their share prices; both stocks are down substantially in the past three years. If Pfizer and Moderna can bounce back, purchasing their shares now might be a great move -- but which is the more attractive option? Let's find out.

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The case for Pfizer

Pfizer has made important moves in the past few years that could pay off down the line. It earned approval for several medicines and vaccines, including Litfulo, a therapy for alopecia areata, and Abrysvo, a respiratory syncytial virus (RSV) vaccine. The drugmaker also made several acquisitions, the most important of which was that of Seagen, a cancer specialist, for $43 billion. Pfizer's pipeline now features many oncology products, and others in various therapeutic areas.

As the company earns more new approvals, its revenue and earnings should continue moving in the right direction. And in that department, Pfizer's coronavirus portfolio is still contributing. In 2024, the pharmaceutical giant's top line was $63.6 billion, 7% higher than the previous fiscal year. Its adjusted earnings per share landed at $3.11, up 69% year over year. Pfizer's vaccine for COVID-19, Comirnaty, and its medicine for the disease, Paxlovid, combined for about $11.1 billion in sales, much higher than in 2023.

The pandemic might be over, but COVID-19 is still here, so Pfizer should generate decent sales from these products for the foreseeable future. That and the new blockbusters it could develop in the next few years, especially in oncology, should allow it to get past some upcoming patent cliffs.

Lastly, Pfizer is a solid dividend stock. It now offers a beefy 6.8% yield, and has increased its payouts by 53.6% in the past decade. Despite underperforming the market in recent years, Pfizer could bounce back as its master plan comes to fruition, and deliver strong returns to patient long-term investors.

The case for Moderna

Moderna also continues to generate sales from its coronavirus vaccine, but it is no longer profitable. In 2024, the company's total revenue dropped by almost 53% year over year to $3.2 billion, while it reported a net loss per share of $9.28, although that was better than the $12.33 loss per share reported in 2023.

Still, there are several things investors should be excited about with this stock. Moderna earned approval for a respiratory syncytial virus (RSV) vaccine, mResvia, last year for people aged 60 and older. It's now awaiting a label expansion for this product in at-risk adults between 18 and 59 years of age.

Furthermore, Moderna's combination COVID/influenza vaccine hit it out of the park in a phase 3 study in 2024. Moderna is also waiting for approval for this new vaccine. And there's more in the pipeline. The biotech is running late-stage studies for several exciting products, including a personalized cancer vaccine that performed well in combination with Merck's Keytruda in mid-stage trials.

Moderna is also working on a vaccine for cytomegalovirus (CMV) -- there currently isn't one that's approved. Its early-stage programs look ambitious, too; for instance, it's developing a potential HIV vaccine. Moderna's mRNA platform has proven successful. If it can continue lining up positive data readouts and regulatory approvals, its financial results will eventually improve, and its stock price could jump.

The verdict

Pfizer and Moderna are very different companies. The former is a large, well-established pharmaceutical giant with a long list of approved products that generate consistent revenue. The latter is a smaller biotech with just a couple of vaccines in its lineup that are currently unprofitable. Naturally, Pfizer beats Moderna in many key metrics -- total sales, profits, and free cash flow:

PFE Revenue (Quarterly) data by YCharts.

Additionally, Pfizer offers a dividend, making it attractive to income-seekers. Lastly, based on forward price-to-sales ratios, Pfizer also seems to be a better value than Moderna:

PFE PS Ratio (Forward) data by YCharts.

So, in my view, Pfizer is the better option, except perhaps for high-risk, growth-oriented investors. Moderna has more upside if some of its pipeline candidates deliver solid clinical results and earn approval, and investors comfortable with significant volatility may opt for its stock instead.

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Prosper Junior Bakiny has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Merck and Pfizer. The Motley Fool recommends Moderna. The Motley Fool has a disclosure policy.