Global pharmaceutical company Pfizer (NYSE:PFE) announced better-than-expected revenue in Q1 CY2026, with sales up 5.4% year on year to $14.45 billion. On the other hand, the company’s full-year revenue guidance of $61 billion at the midpoint came in 0.6% below analysts’ estimates. Its non-GAAP profit of $0.75 per share was 3.9% above analysts’ consensus estimates.
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Pfizer (PFE) Q1 CY2026 Highlights:
- Revenue: $14.45 billion vs analyst estimates of $13.77 billion (5.4% year-on-year growth, 5% beat)
- Adjusted EPS: $0.75 vs analyst estimates of $0.72 (3.9% beat)
- The company reconfirmed its revenue guidance for the full year of $61 billion at the midpoint
- Management reiterated its full-year Adjusted EPS guidance of $2.90 at the midpoint
- Operating Margin: 18.7%, down from 35.2% in the same quarter last year
- Organic Revenue rose 2% year on year
- Market Capitalization: $149.6 billion
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. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Over the last five years, Pfizer grew its sales at a mediocre 4.8% compounded annual growth rate. This wasn’t a great result compared to the rest of the healthcare sector, but there are still things to like about Pfizer.
Long-term growth is the most important, but within healthcare, a half-decade historical view may miss new innovations or demand cycles. Pfizer’s annualized revenue growth of 6.4% over the last two years is above its five-year trend, which is encouraging. 
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 8% year-on-year growth. Because this number is better than its two-year revenue growth, we can see that some mixture of divestitures and foreign exchange rates dampened its headline results. 
This quarter, Pfizer reported year-on-year revenue growth of 5.4%, and its $14.45 billion of revenue exceeded Wall Street’s estimates by 5%.
Looking ahead, sell-side analysts expect revenue to decline by 3.7% over the next 12 months, a deceleration versus the last two years. This projection doesn't excite us and suggests its products and services will face some demand challenges. At least the company is tracking well in other measures of financial health.
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Adjusted Operating Margin
Adjusted operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses – everything from the cost of goods sold to advertising and wages. It’s also useful for comparing profitability across companies because it excludes non-recurring expenses, interest on debt, and taxes.
Pfizer has been a well-oiled machine over the last five years. It demonstrated elite profitability for a healthcare business, boasting an average adjusted operating margin of 32%.
Analyzing the trend in its profitability, Pfizer’s adjusted operating margin decreased by 3 percentage points over the last five years, but it rose by 14.7 percentage points on a two-year basis. We like Pfizer and hope it can right the ship.
In Q1, Pfizer generated an adjusted operating margin profit margin of 18.7%, down 24.5 percentage points year on year. This contraction shows it was less efficient because its expenses grew faster than its revenue.
Earnings Per Share
We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.
Pfizer’s EPS grew at an unimpressive 1.4% compounded annual growth rate over the last five years, lower than its 4.8% annualized revenue growth. This tells us the company became less profitable on a per-share basis as it expanded.
We can take a deeper look into Pfizer’s earnings to better understand the drivers of its performance. As we mentioned earlier, Pfizer’s adjusted operating margin declined by 3 percentage points over the last five years. Its share count also grew by 1.2%, meaning the company not only became less efficient with its operating expenses but also diluted its shareholders. 
In Q1, Pfizer reported adjusted EPS of $0.75, down from $0.92 in the same quarter last year. Despite falling year on year, this print beat analysts’ estimates by 3.9%. Over the next 12 months, Wall Street expects Pfizer’s full-year EPS of $3.06 to shrink by 4.2%.
Key Takeaways from Pfizer’s Q1 Results
We enjoyed seeing Pfizer beat analysts’ revenue expectations this quarter. We were also glad its EPS outperformed Wall Street’s estimates. On the other hand, its full-year EPS guidance missed and its full-year revenue guidance fell slightly short of Wall Street’s estimates. Zooming out, we think this was a mixed quarter. The stock traded up 1.6% to $26.75 immediately following the results.
Should you buy the stock or not? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).