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Stock markets have recorded a number of encouraging days over the past six months as investors appear increasingly bullish about the long-term outlook for the global economy. However, volatility continues across a variety of industries and sectors. If a company’s stock price is falling, you need to understand why.
Stocks on sale are no reason to hit the buy button, and you shouldn’t buy or sell a stock just because it looks like investors are putting in additional money. However, investor sentiment is fickle. Sometimes, investors turn away from a business for some reason, even if the business is doing well.
It could be your chance to pick up a tattered stock and become a co-owner of an attractive business. He introduces two stocks to keep an eye on as we head into 2024.
1. Pfizer
pfizer (PFE -0.35%) As of this writing, it is down about 37% over the subsequent 12 months. That’s a sharp drop from where the stock was trading a few years ago at the height of the pandemic-era success of blockbuster COVID-19 vaccines and antiviral treatments.
In 2022, Pfizer became the first company in the history of the pharmaceutical industry to record revenue of over $100 billion. However, sales for the first nine months of 2023 totaled $44 billion, a difference that was notable due to a sharp decline in sales of COVID-19 products.
Earnings for the nine-month period were $5.5 billion on a generally accepted accounting principles (GAAP) basis, or $9.9 billion on an adjusted basis. This post-pandemic decline was inevitable at some point. And Pfizer’s total revenue for the first nine months of 2023 was about 13% higher than what it reported during the same period in 2019, before the pandemic.
Products that boosted Pfizer’s financial performance in the first nine months of 2023 include the Prevnar vaccine (for pneumococcal disease), Nurtec (a migraine drug that the company acquired during its acquisition of Biohaven Pharmaceuticals), and Vinda Kell family of drugs (for transthyretin amyloid cardiomyopathy), Xeljanz (for multiple diseases including rheumatoid arthritis and ulcerative colitis), and Ibrance (first-line treatment for HR+/HER2- metastatic breast cancer).
Although the pandemic-era growth was short-lived, the company made billions of dollars in profits thanks to these products and quickly began planning for the next era of regulatory and business victories.
That time may be getting closer and closer. Pfizer plans to launch 19 new products and label enhancements in the midst of an 18-month period, which is estimated to increase annual revenue by $20 billion by 2030. The company is also targeting an additional $25 billion in annual revenue by the looming deadline of 2030. For business transactions.
Pfizer continues to make a series of acquisitions, most recently acquiring Seegen, significantly strengthening its oncology portfolio. Income investors will be pleased to know that Pfizer pays a dividend, and the share price movement in recent months has pushed its yield to nearly 6%.
Over the next five years, the dividend grew by about 17%. There’s still a lot to like about this stock, and patient investors can benefit from stable income and a long-term growth strategy over the next five to 10 years.
2. Etsy
Etsy (ETSY -2.71%) This is a decline of about 47% compared to a year ago. While some growth stocks have rebounded as markets have rebounded over the past few months, some companies, particularly those heavily exposed to discretionary levels of consumer spending, continue to struggle.
This is a notable factor in Etsy’s stock price slump. Other issues are also at play, including fluctuations in profitability, slowing gross merchandise sales (GMS) and revenue, and new customer acquisition.
However, the tide may be slowly but surely changing. It is also important to note that the business is still making significant progress from a growth perspective compared to pre-pandemic. Let’s look at some important facts and figures.
In the third quarter of 2023, Etsy reported revenue of $636 million. GMS is $3 billion. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) was $182 million. These numbers represent year-over-year growth rates of 7%, 1.2%, and 9%, respectively.
However, based on four-year compound annual growth rates, these numbers increased by 34% in revenue, 26% in GMS, and 44% in EBITDA. Looking at the most recent quarter, the number of active buyers reached just under 92 million, an increase of 4% from a year ago and 109% from four years ago.
Etsy also reactivated 6 million buyers in the third quarter of 2023, a 19% increase over the same quarter in 2022. The company has work to do, but there are signs of progress. And recent layoffs and the sale of Elo7, known as Brazil’s His Etsy but a lagging business, should make a difference in the coming quarters.
Profitability has also improved, with generally accepted accounting principles (GAAP) profit reaching $224 million in the first nine months of 2023. Investors may think that even a small position in this stock will pay off in the coming years.
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