The stock market has experienced significant growth this year, largely driven by a select few tech giants that dominate the S&P 500 and capitalize on the booming interest in artificial intelligence (AI). While this surge has benefited many companies, several others have struggled to keep up, creating opportunities for savvy investors. Among these are Pfizer (NYSE: PFE) and Snap (NYSE: SNAP). Despite their recent challenges, both stocks may present promising prospects for investors looking to buy on a dip.
Starting with Pfizer, this pharmaceutical powerhouse has faced a storm of difficulties lately. The major decline in revenue and earnings was largely attributed to a decrease in sales from its COVID-19 vaccine and treatment. Recently, the company faced mixed results in its pivotal trial for a combination vaccine targeting both COVID-19 and influenza. Additionally, setbacks in promising areas like weight loss have compounded its challenges.
However, amidst these hurdles, signs of recovery are emerging. In its latest quarterly report, Pfizer recorded a modest yet positive year-over-year revenue growth, reaching $13.3 billion—an increase of 2%. This upturn is significant, especially as it’s not solely reliant on the recent acquisition of Seagen, a cancer specialist acquired for $43 billion.
Despite some pipeline bumps, Pfizer has secured numerous approvals in 2023—more than any competitor—indicating that its portfolio could be on the brink of a transformative phase. The company is also pushing ahead with vital clinical trials, including a new weight-loss drug. With its recent focus on oncology and the strength of its financials—showing a forward yield exceeding 5.88%—Pfizer can appeal to income-focused investors. Historically, it has boosted dividends by 62% over the last decade, positioning itself favorably for long-term growth.
Turning to Snap, the social media platform has seen a significant 50% drop in stock value this year, drawing skepticism from investors. Nevertheless, its fundamentals show promising improvements. In the latest quarter, Snap’s revenue climbed by 16% year-over-year, totaling $1.2 billion. While it hasn’t returned to its previous heights of growth, this uptick signifies potential recovery.
One of Snap’s major strengths lies in its user base, which continues to expand. Recently, the platform reported 432 million daily active users, reflecting a 9% increase from the previous year. The significant growth in monthly active users could set Snap on a trajectory to reach an impressive 1 billion users within a few short years. This growing ecosystem makes it increasingly attractive for advertisers seeking targeted campaigns.
Additionally, Snap is diversifying its revenue streams through initiatives like Snapchat+, a premium subscription model, and investments in generative AI and augmented reality. If these strategies resonate with users and advertisers alike, Snap could evolve into a more profitable entity.
Both Pfizer and Snap may present unique investment opportunities amidst their struggles. While investing involves risks, particularly in the current volatile market, both companies are taking steps toward recovery and innovation. Long-term investors might explore these beaten-down stocks with the potential for significant rewards, especially as market dynamics shift and new innovations come to fruition.
As always, due diligence is essential before making any investment, especially in companies navigating through tumultuous periods. By closely monitoring these organizations and understanding their trajectories, investors can make informed decisions that align with their financial goals.