Eli Lilly, Pfizer, and AstraZeneca: 2025 Vaccine Makers to Watch

Leading vaccine makers like Eli Lilly and Co. (NYSE: LLY), Pfizer Inc. (NYSE: PFE), and AstraZeneca plc (NASDAQ: AZN) may have faded from the spotlight since the peak of the COVID-19 pandemic, but now there is reason to expect renewed interest. As investors look ahead to the second Trump administration, the incoming president's nomination of outspoken vaccine critic Robert F. Kennedy Jr. to the position of U.S. Secretary of Health and Human Services has refocused attention on the future of these companies and their role in the broader pharmaceutical and healthcare sectors.

Eli Lilly: Impressive Roster of Products, Pullback Due to Lowered Guidance

Of the three major vaccine firms listed above, Eli Lilly has performed the strongest over the last year. Shares of LLY have risen by nearly a quarter during that time and by a shocking 543% in the last five years. Eli Lilly's rapid growth has been linked to its deep and varied roster of leading pharmaceutical products, including Trulicity and Mounjaro (treatments for diabetes) and Prozac and Cymbalta (treatments for clinical depression), among many others.

In particular, Eli Lilly's Mounjaro and Zepbound—both with the active ingredient tirzepatide to treat diabetes and foster weight loss—are strong sellers despite up-and-coming competition from companies like Hims & Hers Health Inc. (NYSE: HIMS). For the latest quarter, volume growth for these two products helped to drive a 20% year-over-year improvement to revenues. Eli Lilly's upcoming product pipeline is also impressive. It has recently received FDA approval for Ebglyss, a treatment for moderate-to-severe atopic dermatitis, and approval in Japan for Kisunla, a treatment for early symptomatic Alzheimer's disease.

Despite the overall gains in the last year, LLY shares have dropped by about 16% in the last month after the company lowered its full-year EPS guidance and the top end of its revenue guidance for the same period.

However, the lowered guidance is a result of inventory management and in-process research and development costs rather than fundamental changes in the company's business.

This means that it may be an opportunity to buy LLY shares at a relative bargain.

Pfizer: Sell-Off May Present an Opportunity

Pfizer produces of one of the most popular COVID-19 vaccines in the United States, and so it is perhaps no surprise that shares have pulled back 10.4% in the last month, particularly following the election. But the firm's stock performance has been highly volatile for the entirety of the last year, and it is currently down about 16% in that timeframe.

One upside is that the sell-off of Pfizer shares has made the stock a better value proposition. As of November 25, Pfizer's forward P/E ratio is just 8.8, considerably lower than Eli Lilly at 56.5 and AstraZeneca at 16.2. Pfizer also has a competitive price-to-book ratio of 1.54.

Analysts also continue to see long-term potential for the company following what may be an intermediate period of instability, rating the stock a Moderate Buy and assigning a consensus price target of $32.92, more than 28% above current levels.

AstraZeneca: Surging Demand for Oncology Products Fuels Growth

AstraZeneca beat analyst EPS predictions for its latest quarter thanks to surging demand for some of its oncology products, including Imfinzi and Calquence. These treatments are pivotal in addressing critical needs in cancer care, cementing AstraZeneca's position as a leader in the market. 

Building on this momentum, the company raised its full-year guidance for total revenue and core EPS growth, reflecting confidence in its ongoing performance and future prospects. AstraZeneca's strong product lineup is matched by its pipeline, as analysts expect the company to release as many as two dozen new products by the end of the decade.

AstraZeneca is currently rated a Moderate Buy with a consensus price target of $89.75, offering an upside potential of nearly 37% from current levels.

Biotech Leaders Beyond Vaccines

As the vaccine policy landscape evolves under the incoming Trump administration, Eli Lilly, Pfizer, and AstraZeneca are well-equipped to navigate uncertainties and capitalize on their strengths. If you are considering an investment in biotech you might take comfort in stocks that are not too reliant on vaccines for continued revenue growth—and all three of these companies have fast-growing segments completely unrelated to vaccines. 

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DICK'S Sporting Goods: The Under-the-Radar Buy-and-Hold Winner

DICK'S Sporting Goods (NYSE: DKS) emerged as a buy-and-hold quality stock before 2020, but its results since confirm the fact. This company is firing on all cylinders after establishing itself as the leader in its category and can compete against big-box stores like Walmart (NYSE: WMT), Target (NYSE: TGT), and Costco (NASDAQ: COST). Its selection of high-quality, brand-name sporting goods spans the recreational universe and is the source for athletes. The brand quality is compounded by an operational quality that sustains financial health despite business investment and capital returns. The net result is a best-in-breed retail stock with a positive growth trajectory, healthy cash flow, and robust return for buy-and-hold investors.

DICK'S Sporting Goods Rises After Beat-and-Raise Quarter

DICK'S Sporting Goods had another solid quarter despite the macroeconomic headwinds and the negative impact of a calendar shift. The company reported $3.06 billion in revenue, which was flat compared to the prior year but 100 basis points (bps) better than expected. The strength was driven by an acceleration in comp store growth to 4.2%, more than double the prior year, offset by five fewer stores. The company says it had a strong back-to-school season and that new concepts resonate with consumers. Digital remains a critical element. 

The margin news is also good. The adjusted results showed some contraction, but GAAP expanded to produce growth. Still, the $2.75 adjusted EPS is 220 bps ahead of MarketBeat’s reported consensus and underpins a robust financial condition. The critical takeaway is that the company sustains solid margins in a challenging environment and produces ample cash flow. 

DICK'S is cash-flow positive and able to invest in growth while maintaining the balance sheet health and returning capital to investors. The dividend is worth $4.40 to investors in 2024, about 2%, with shares near record highs, and the buybacks reduced the count by 4.5% YTD at the end of Q3. 

The guidance aligns with the outlook for capital returns. DICK'S raised its full-year targets because of the Q3 strength and points to a healthy Q4 holiday season. The company may outpace its guidance because of the trends, as it has all year, and persist with strength next year. The combined impact of easing monetary headwinds and a consumer-friendly president is expected to sustain consumer spending trends, if not accelerate them. The analysts' forecasts for 2025 are likely low in this scenario, so the revision upgrade cycle will likely continue. 

The Analysts' Trends Lead DICK'S Sporting Goods Stock to Higher Prices

The analysts' trends in 2024 are bullish and unlikely to change, given the Q3 results and guidance. The trends include numerous upgrades and price target increases, with the sentiment trending higher to Moderate Buy from Hold and the price target up by 70% in 12 months. The consensus price target assumes fair value near record highs, but the revision trends put the stock in the high-end range near $280, a 20% gain from the critical resistance point and well above the current all-time high.  

The critical resistance point is near $235 and may be reached soon. If not, this stock could remain range-bound at current levels until there is evidence of strength in 2025. That could come as early as the Q4 earnings release, due in February. The worst-case scenario is that this stock moves to the low end of its trading range before continuing the uptrend, a movement that would present a better entry point. Regardless, trading at 15x and expected to grow another mid-single-digit amount in 2025, it is a cheap stock to own and pays a healthy, reliable capital return worthy of inclusion in a dividend-growth portfolio. 

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2 Cheap Quantum Computing Stocks to Buy Instead of Chasing IonQ

Quantum computing is causing rumblings in the stock market, as evidenced by the interest in stocks like IonQ Inc. (NYSE: IONQ), which have surged 156% year-to-date (YTD). The computer and technology sector pioneer IonQ is widely being accepted as the leader in this segment based on its 102% YoY growing revenues, a $54.5 million deal with the United States Air Force Research Lab (AFRL), and financial backing from industry giants like Amazon.com Inc. (NASDAQ: AMZN), Lockheed Martin (NYSE: LMT) and Samsung Electronics Co. Ltd. (OTCMKTS: SSNLF). IonQ is one of the few companies that have actually built and tested a quantum computer.

While quantum computing has been around for over a decade, the applications for quantum computing, ranging from drug discovery, cryptography, materials science, and complex financial modeling, are driving interest in these stocks. The Trump victory and Elon Musk have also fueled speculation for more interest in quantum computing as a nation. Amazon Web Services announced its Quantum Embark advisory program on Nov. 22, 2024, to help customers prepare for the era of quantum computing.

Quantum computing is in its infancy as a viable commercial industry, and no company has profited from it. While IonQ generated $12.6 million in Q2 2024, it also reported an adjusted EBITDA loss of $52.5 million. Most of the "revenue" generated by quantum computing companies is usually research grants, funding, and financing. With that in mind, here are two highly speculative, low-priced quantum computing stocks to keep on your radar if you have risk capital to burn.

D-Wave: Industry Veteran Facing a Cash Crunch  

D-Wave Quantum Inc. (NYSE: QBTS) was founded in 1999, making it one of the oldest companies in the industry. Conventional quantum computers use quantum properties like superposition (particles existing in multiple states simultaneously) and entanglement (quantum particles linked change state regardless of distance) to perform computations in a gate model. D-Wave focuses on annealing quantum computers. Annealing uses quantum fluctuations to find optimal solutions to problems gradually settling into a system's lowest energy state. It's best for solving optimization problems in the fields of materials science, logistics, and finance.   

Quantum Computing as a Service (QCaaS) Generates Revenue

D-Wave has built and even sold quantum computers and generates revenue for its quantum computing-as-a-service (QCaaS) plans. In fact, D-Wave saw a 41% YoY revenue jump for its QCaaS service to $1.6 million in Q3 2024. Unfortunately, net loss also jumped 41% YoY to $22.7 million. The company had 132 customers, comprised of 76 commercial customers, including 27 Forbes Global 2000 companies. Revenue from government customers increased by $800,000, research customers increased by $600,000, and commercial customers fell by $200,000.

D-Wave Faces a Cash Crunch Into 2025 But Has Up to $130 Million Issuance Capacity

At the end of the quarter, D-Wave had $29.3 million. The company still has $79.1 million of issuance capacity under its a-the-market (ATM) program to raise cash and $49.9 million available in its equity line of credit (ELOC) of issuance capacity subject to conditions including having a sufficient number of registered shares and a stock price above $1.00. The company expects fourth-quarter revenues to improve in other third quarters and fiscal 2024 adjusted EBITDA loss to be less than $54.3 million.

Important Milestones Achieved in Q3

The U.S. Department of Defense has deemed D-Wave “awardable” under its Tradewinds buying program. The program is meant to accelerate the procurement and adoption of emerging technologies. The company announces that NTT DOCOMO is planning the production deployment of a hybrid quantum application built with D-Wave technology. D-Wave completed the calibration of a 4,400 qubit Advantage2 processor, which was a "significant development milestone" on the path to the commercial release of Advantage2.

D-Wave CEO Alan Baratz stated, “Annealing quantum computing is continuing to drive the commercial adoption of quantum technology. “Organizations around the world – from Vinci Energies in Europe to NTT DOCOMO in Japan – are recognizing the value our technology can bring right now in fueling discoveries, facilitating operational excellence and driving measurable outcomes."

Rigetti Computing: Building Quantum Processors and Computers

Full-stack quantum-classical computing company Rigetti Computing Inc. (NASDAQ: RGTI) designs and manufactures quantum processing units (QPUs) through its Novera brand and offers QCaaS plans. Rigetti uses superconducting transmon qubits, which are fabricated on chips. The company is focused on building scalable quantum computers. Its Quantum Cloud System (QCS) integrates into any private, public, or hybrid cloud. The UK’s National Quantum Computing Centre (NQCC) opened on Oct. 25, 2024, with a fully operational Rigetti 24-qubit Ankaa-class system. It's available for NQCC researchers to benchmark, test, and develop exploratory applications.

Still Losing Money, But Has a Longer Cash Runway

Rigetti reported Q3 2024 revenue of $2.4 million and a net loss of $14.3 million. Its revenues come from government contracts with the DOD and the Department of Energy (DOE). After raising $12 million in the quarter, the company has $92.6 million in cash and cash equivalents.

Rigetti plans to release a 36-qubit system by the middle of 2025 and a 100-qubit system by the end of the year in 2025. Rigetti plans to develop the 336-qubit Lyra system afterward.

Rigetti Computing CEO Subodh Kulkarni commented, “We believe superconducting-qubits have many advantages over other-qubit modalities, including that they are fabricated using well-established semiconductor design and manufacturing techniques. Superconducting qubits also perform faster gate operations than other qubit modalities. Our system gate speeds consistently achieve an active duration of 60 to 80 nanoseconds, which is four orders of magnitude faster than other modalities such as ion traps and pure atoms.”

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