Global pharmaceutical company Pfizer (NYSE: PFE) announced better-than-expected revenue in Q4 CY2025, but sales fell by 1.2% year on year to $17.56 billion. The company expects the full year’s revenue to be around $61 billion, close to analysts’ estimates. Its non-GAAP profit of $0.66 per share was 16.2% above analysts’ consensus estimates.

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Company Overview

With roots dating back to 1849 when two German immigrants opened a fine chemicals business in Brooklyn, Pfizer (NYSE: PFE) is a global biopharmaceutical company that discovers, develops, manufactures, and sells medicines and vaccines for a wide range of diseases and conditions.

Revenue Growth

A company’s long-term performance is an indicator of its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Unfortunately, Pfizer’s 5.6% annualized revenue growth over the last five years was mediocre. This was below our standard for the healthcare sector and is a tough starting point for our analysis.

We at StockStory place the most emphasis on long-term growth, but within healthcare, a half-decade historical view may miss recent innovations or disruptive industry trends. Pfizer’s recent performance shows its demand has slowed as its annualized revenue growth of 2.5% over the last two years was below its five-year trend.

We can better understand the company’s sales dynamics by analyzing its organic revenue, which strips out one-time events like acquisitions and currency fluctuations that don’t accurately reflect its fundamentals. Over the last two years, Pfizer’s organic revenue averaged 3.9% year-on-year growth. Because this number aligns with its two-year revenue growth, we can see the company’s core operations (not acquisitions and divestitures) drove most of its results.

This quarter, Pfizer’s revenue fell by 1.2% year on year to $17.56 billion but beat Wall Street’s estimates by 5.5%.

Looking ahead, sell-side analysts expect revenue to decline by 4.3% over the next 12 months, a deceleration versus the last two years. This projection is underwhelming and suggests its products and services will face some demand challenges.

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Operating Margin

Pfizer has been an efficient company over the last five years. It was one of the more profitable businesses in the healthcare sector, boasting an average operating margin of 29.4%.

Looking at the trend in its profitability, Pfizer’s operating margin decreased by 12 percentage points over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability.

In Q4, Pfizer generated an operating margin profit margin of negative 9.3%, down 25.2 percentage points year on year. This contraction shows it was less efficient because its expenses increased relative to its revenue.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Pfizer’s EPS grew at an unimpressive 3.5% compounded annual growth rate over the last five years, lower than its 5.6% annualized revenue growth. This tells us the company became less profitable on a per-share basis as it expanded.

Diving into the nuances of Pfizer’s earnings can give us a better understanding of its performance. As we mentioned earlier, Pfizer’s operating margin declined by 12 percentage points over the last five years. This was the most relevant factor (aside from the revenue impact) behind its lower earnings; interest expenses and taxes can also affect EPS but don’t tell us as much about a company’s fundamentals.

In Q4, Pfizer reported adjusted EPS of $0.66, up from $0.63 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Pfizer’s full-year EPS of $3.23 to shrink by 6.8%.

Key Takeaways from Pfizer’s Q4 Results

We were impressed by how significantly Pfizer blew past analysts’ revenue expectations this quarter. We were also glad its EPS outperformed Wall Street’s estimates. On the other hand, its organic revenue missed and its full-year EPS guidance fell short of Wall Street’s estimates. Overall, this quarter could have been better. The stock traded down 1.2% to $26.34 immediately after reporting.

Is Pfizer an attractive investment opportunity at the current price? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here (it’s free).