Where will Terry's stock be in 10 years?

Terry Rae Inc. (NYSE: PFE)The stock has been struggling for some time. Over the past 12 months, its shares are down 36%. Recent lackluster growth, a reliance on acquisitions, and a lot of question marks have led many investors to turn their noses up at this top healthcare stock.

But it could be a mistake. Can Terry's return to glory in 10 years and prove itself a good buy again? Here's a look at how Terrific is doing 10 years from now, and whether investors should consider buying the stock today.

Oncology may play a bigger role

Ten years from now, Terry's financials could change dramatically, and it would be a surprise if its COVID vaccine brought in any meaningful revenue, now that fears of the disease have subsided. If its COVID vaccine generates any meaningful revenue, it would be a pleasant surprise, as concerns about the disease have subsided. In 2023, despite a significant drop in sales of $70%, Comirnaty was still the company's best-selling product, generating more than $11.2 billion in revenues for the company.

But 10 years from now, the oncology business may be the cornerstone of the company. Last year, the oncology business generated $11.6 billion in total revenue, with Ibrance, a breast cancer drug, leading the way with nearly $4.8 billion in sales. Terrific has even bigger plans for its oncology unit, which it acquired last year for a whopping $43 billion for Seagen, a company that makes antidrug co-conjugates that are thought to be more effective than traditional cancer treatments, while also having fewer side effects.

Terrific believes Seagen will add up to $10 billion in revenue by 2030, and in 2021, Terrific acquired Trillium Therapeutics, a clinical-stage company with a portfolio of biologics designed to harness the immune system to destroy cancer cells, for $2.3 billion.

Oncology is now a significant part of Terry's business, accounting for 20% of its revenue, and I wouldn't be surprised to see oncology become Terry's largest business ten years from now. Cancer continues to be one of the most worrisome issues in the healthcare industry, and if Terry Rae is successful in helping to bring better treatments to the marketplace, it will be a win not just for investors, but for everyone.

Revenues and earnings may rebound

In the short term, it's easy to be pessimistic about the future of Terry because of Terry's lack of revenue growth. T煇 is facing multiple patent cliffs, with major drugs such as Eliquis and Vyndaqel likely to see a decline in demand over the next decade due to the loss of patent protection.

But this is also a normal phenomenon in the healthcare industry. Companies need to build their business so that it is diverse enough and has a strong enough product line to innovate and grow. No matter how good a treatment is, there will inevitably be a patent cliff in the future, and competition will follow.

For decades, Terry has been a leader in the healthcare field because of its ability to innovate and find new avenues for growth. With more than 100 clinical trials underway as of the end of January, I am optimistic about the company's growth prospects. Terrific has also invested in strengthening its product portfolio through a number of acquisitions.

With $12.7 billion in cash and short-term investments on its books, and with the company expecting to remain profitable this year, Terry's financial position still looks strong enough to allow the company to invest in more growth opportunities in the future. But in health care, sometimes it only takes one or two promising blockbuster drugs to transform a business. In the long run, Terry's investments in R&D and acquisitions of promising companies will pay off for investors.

Should you invest in Terry's stock today?

According to analysts' estimates, Terry's stock is trading at just 12 times its projected future profits. This is not an expensive stock by any stretch of the imagination, as investors seem to be discounting Terry's stock due to the uncertainty of its future business.

But Terry is not as dangerous as it looks. The company is still in good shape and could be an ideal buy for the long term. The future may be bumpy, but in 10 years' time, Tingyi's business will probably be more diversified. There are many growth opportunities for Terrific, and I am not too worried about this stock in the long run.

Should you invest $1,000 in Terry's now?

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David Jagielski does not own any of the aforementioned stocks.The Motley Fool has a position in Terry Rae, Inc. and recommends Terry Rae, Inc.The Motley Fool has a disclosure policy.

Where Will Terry's Stock Be in 10 Years? This article was originally published in The Motley Fool.