Pharmaceutical giant Pfizer (PFE 2.40%) experienced a tremendous windfall as one of the leading COVID-19 vaccine manufacturers during the pandemic. However, there are clues that vaccine demand is falling.

Declining vaccine demand would undoubtedly impact Pfizer's business, but does that mean investors should run away from the stock? Here is what you need to know.

Signs of falling vaccine demand

COVID-19 vaccine demand could be in decline; fellow vaccine maker Novavax recently cut its sales forecast for 2022 from between $4 billion and $5 billion to between $2 billion and $3 billion, a result of declining demand for its COVID-19 vaccine. Additionally, vaccine maker Biovac, which partnered with Pfizer to help produce vaccine doses, recently warned that production could fall short this year because of slumping demand.

2022 should still be great for Pfizer. The company recently issued strong guidance, calling for $32 billion in revenue from its COVID-19 vaccine, Comirnaty, based on signed contracts for dose purchases as of July. This contributes to total company expectations of $98 billion to $102 billion in 2022 revenue (marking 21% to 25% year-over-year growth) and earnings per share (EPS) of $6.30 to $6.45 (or 55% to 59% growth).

Investors will need to see what 2023 guidance looks like as the end of the year approaches, but should prepare for a significant pullback. According to Statista, global COVID-19 vaccine revenue could fall as much as 43% next year -- and continuing to tail off in the years beyond.

How it could impact Pfizer

You can see below how Pfizer's business exploded higher in 2021; Comirnaty could contribute $32 billion in revenue this year, and its COVID-19 treatment, Paxlovid, could add another $22 billion in sales. If you subtract the combined $54 billion in revenue from 2022 guidance, the resulting $48 billion completely changes the growth trajectory you see below. In other words, Comirnaty and Paxlovid primarily drove Pfizer's growth over the past two years.

PFE Revenue (TTM) Chart

PFE Revenue (TTM) data by YCharts

Fortunately, it's doubtful that COVID-19-related product sales will go to zero overnight. COVID-19 vaccine usage could fade over the next several years, but future mutations, vulnerable demographics, and under-vaccinated emerging markets could still need doses.

Ultimately, investors should prepare for Pfizer's COVID-19 products to become more of a sideshow and not the colossal growth driver it was over the past two years. Pfizer's overall revenue and EPS could shrink as a result.

Where do investors go from here?

Investors don't have to avoid the stock just because Pfizer's likely to walk back some of its growth from the pandemic. For starters, the windfall of COVID-19 revenue has rejuvenated the balance sheet; management reduced total long-term debt from more than $60 billion to $40 billion, while cash grew to a whopping $33 billion. In other words, the company went from having many billions of debt to almost none on a net (debt minus cash) basis. That cash balance will likely grow as vaccine revenue keeps trickling in over the next several quarters.

PFE Cash and Short Term Investments (Quarterly) Chart

PFE Cash and Short Term Investments (Quarterly) data by YCharts

Pfizer will have plenty of cash to fund pipeline development, make a strategic acquisition, or do significant share repurchases. Management could repurchase about an eighth of its existing shares if it chose to. That alone can support EPS growth if revenue slides.

Meanwhile, Wall Street is already pricing in the decline of Pfizer's COVID-19 sales. The stock has averaged a price-to-earnings ratio (P/E) of 17 over the past decade, but trades at a P/E of just 9 today. Pfizer could lose half of its bottom line, and the stock would only then trade roughly in line with its historical valuation.

Pfizer might not be a screaming bargain, mainly because it's hard to determine how quickly or steeply revenue and profits could fade as vaccine demand declines. However, long-term investors have plenty of food for thought when considering holding the stock over the years ahead.