Pfizer (PFE): fair value

Fair-value band

The normal range for this name runs from $23 (cheap) to $36 (expensive); it is now priced at $29.

That is 0.1σ below this name's own normal premium.

Standing premium not backed by fundamentals: nothing in this company's health score has changed to earn the rating the market normally gives it.

Is Pfizer undervalued?

Fair, relative to its own history. Pfizer trades at $29, 39% above the fair value this model estimates, but it has habitually traded 40% above fair value, and today's gap is 0.1σ below that norm, within the range it normally trades in, so the verdict is Fair: priced normally for itself, not necessarily fairly valued. The health score behind that pricing hasn't moved to earn it, though: read Fair here as “priced the way this name normally is”, not as a claim the price is justified.

Diligence checklist

7 pass · 2 fail · 2 no data

• PASSCash actually collected from profit, last 12 months: 159%XBRL · Pfizer gets $1.59 of real cash for every $1 of reported profit which means profits are real and not just numbers on paper. That's a good sign. 1 of the last 3 years was loss-making and can't be scored on this ratio at all: dividing cash flow by a loss says nothing about earnings quality.
• PASSGap between paper profit and real cash: -4.5%XBRL · Pfizer's "profit on paper" and "cash in the bank" gap is small enough to pass.
• FAILDebt compared to one year of cash earnings: 4.60xXBRL (dealbreaker) · It would take 4.60 years of earnings to clear what Pfizer owes, net of the cash it holds. Anything past four years is a dealbreaker for me: at this level a single bad year is a refinancing problem rather than a bad year, and no discount to fair value survives that.
• FAILHow much more it earns on capital than that capital costs: -3.71ppXBRL · Pfizer earns 3.7 points LESS on the capital it employs than that capital costs. Every dollar reinvested here destroys value instead of creating it, which turns growth into a reason to worry rather than a reason to own the business. It has been below its cost of capital for 4 straight quarters. Three years of that is where I stop work, so this is worth watching rather than ignoring. The gap is no wider than it was at the start of the window.
• PASSStock sold by executives and directors on the open market, last 6 months: $0.1MEDGAR · Insiders at Pfizer sold $0.1M of stock on the open market in the last 6 months, which is inside the $5 million line I draw. Selling that size is ordinary diversification rather than a signal about the business. The sellers: Damico Jennifer B. $0.1M. Options being exercised, and shares held back to cover the tax on them, are not sales and I don't count them either. filing ↗
• PASSHow long the CEO has run this company: 7.8 yearsTEXT · Pfizer's chief executive has held the job since January 1, 2019, which is 7.8 years and covers a full cycle: good years and bad ones, both on this person's record. That is long enough for the record to mean something. Time served isn't the same as doing the job well, though, so read this next to the return-on-capital line above, which covers the same years. filing ↗
• PASSProfit margin held up during the last sales slump: 72.7% vs 59.9% baseXBRL · The last time Pfizer's revenue fell, its profit margin per unit sold only slipped a little, from about 59.9% to 72.7%. It means Pfizer isn't being forced to cut prices to keep product moving, which is what a company with a weak competitive position has to do. This is the accounts talking, not the filing: I'm reading the 6 quarters from July 2023 to September 2024, measured against the year going into it, and a shift in what the company sold can imitate pricing power either way.
• PASSNormal profit margin across a full business cycle: FCF margin 21.5% vs 21.1% medianXBRL · Pfizer's current cash margin (21.5%) is a bit above its long-run average (21.1%). This is a mild warning rather than a problem: don't assume today's good margin lasts forever. My valuation grows the long-run average, not the temporarily high figure. Across the window the margin ran between 11.8% in December 2023 and 45.1% in October 2021.
• N/AHow much of the stock trades on an average day: $932MMARKET · Pfizer trades about $932M of stock a day. Taking a fifth of that for ten sessions, I could build or exit roughly $1,863M without leaning on the price. There's no pass or fail here because the answer depends on how big a position I'd actually want to take.
• N/AShare of revenue from its single biggest customer: not establishedTEXT · I fetched and read Pfizer's February 26, 2026 10-K but found no sentence about customer concentration. That isn't the same as the filing saying there is none: it may simply be worded in a way my search doesn't catch. Read Item 1 and the concentration-of-risk note yourself before trusting this row. filing ↗
• PASSWhether the company switched auditors in the last 2 years: noneEDGAR · Companies sometimes switch accounting auditors right before something bad is uncovered which can be a warning sign. Pfizer hasn't changed auditors in the last 2 years, so there's no such red flag here.