Pfizer (PFE 0.66%) has been an underachiever. Sure, the company launched a successful COVID-19 vaccine and has built a large pipeline. However, its shares have lagged well behind the market for years.

That lackluster performance could be a thing of the past, though. Pfizer is beating the market so far in 2021. It could pick up momentum going forward. There's even a good case to be made that buying Pfizer stock right now could realistically double your money within five years. Here's how.

A person looking at a chalkboard drawing of a light bulb, an equal sign, and a stack of cash.

Image source: Getty Images.

Follow the money

Stock prices follow earnings -- over the long term. If a company can deliver strong earnings growth, the likelihood is pretty high that its shares will move higher.

I mention this old investing maxim because Pfizer's earnings will almost certainly grow significantly over the next five years. The company projects adjusted earnings will increase by a risk-adjusted compound annual growth rate in the double-digit percentages through the end of 2025. This growth is on top of Pfizer's juicy dividends that investors have loved for a long time. 

The combination of this level of growth with solid dividends could easily propel the big pharma stock to at least come close to doubling within the next five years. Moreover, Pfizer's projected growth rate is pessimistic.

CEO Albert Bourla noted in Pfizer's second-quarter conference call that its projections don't include any effect from its COVID-19 vaccine. This is the product that Pfizer expects will make at least $33.5 billion this year. And that total doesn't reflect the recent order of 200 million additional doses by the U.S. government. 

Yes, Pfizer splits profits from the COVID-19 vaccine with its partner, BioNTech. But generating a level of earnings growth that should be enough, along with a sustained strong dividend, to enable the stock to double over the next five years isn't a difficult challenge for the big drugmaker.

Keep in mind that Pfizer's total return more than doubled over the last eight years. This performance was achieved during a period when the company was weighed down by declining sales of older drugs that had lost exclusivity. Thanks to the merger of Upjohn with Mylan last year, that's no longer an issue for Pfizer.

A couple of wild cards

There are at least two wild cards that could help boost Pfizer stock even more in the not-too-distant future. The most important of these is what happens with COVID-19.

With Pfizer's shares trading at only 11.5 times expected earnings, investors clearly aren't counting on recurring revenue for the company's COVID-19 vaccine to be sustainable. But what if it is?

It's certainly possible that new coronavirus variants could emerge that drive the need for vaccinations on an annual or even more frequent basis. Pfizer (with BioNTech) and Moderna are in the best position to profit if this happens.

Ongoing cases of COVID-19 could also help Pfizer on another front. The company hopes to file for Emergency Use Authorization (EUA) by the end of this year for an oral antiviral drug that just might be its next COVID-19 blockbuster.

Another important wild card is what the company does with its fast-growing cash stockpile. Bourla said in the Q2 call that Pfizer "will continue to pursue business development opportunities with the potential to further enhance our long-term growth prospects." 

Playing devil's advocate

Let's play devil's advocate, though. Are there potential issues that could prevent Pfizer stock from doubling over the next five years? Absolutely.

Probably the biggest challenge for the company is that patents for several of its top drugs expire in a few years. Investors could look ahead to this coming patent cliff and ignore the strong growth that Pfizer is likely to deliver before then.

Basic U.S. patents for cancer drug Inlyta and autoimmune disease drug Xeljanx expire in 2025. Pneumococcal vaccine Prevnar 13 and blood thinner Eliquis follow suit in 2026. Breast cancer drug Ibrance and prostate cancer drug Xtandi lose U.S. patent exclusivity in 2027. 

Pfizer could also experience significant pipeline setbacks. Sales for its COVID-19 vaccine could plunge within the next couple of years instead of remaining robust. 

Still, Pfizer -- like other big drugmakers -- can be quite adept at extending the commercial success of products through additional patents beyond the basic patents. The company's double-digit earnings growth projection, as mentioned previously, is risk-adjusted. Pfizer can have some pipeline failures and still achieve its goal. And there's a good chance that COVID-19 vaccines will be needed for a long time to come.

The risks for Pfizer are real. But its path to doubling investors' money over the next five years appears to be realistic, too.