Valuation always matters in investing. And sometimes you can find stocks that are especially great bargains.

Three Motley Fool contributors believe they've done just that. Here's why they think Altimmune(NASDAQ: ALT), Moderna(NASDAQ: MRNA), and Pfizer(NYSE: PFE) are dirt cheap now, and why buying these value stocks could be a brilliant move.

A small-cap stock with a huge opportunity in GLP-1

David Jagielski(Altimmune): If you want to swing for the fences, one underrated GLP-1 weight loss drug company you'll want to consider investing in right now is Altimmune. It's not the safest healthcare stock to own as there's no guarantee of how well its GLP-1 drug candidate, pemvidutide, will perform in late-stage trials, but its clinical results so far have been promising.

In a 48-week phase 2 trial, participants on the highest dose (2.4 mg) of pemvidutide lost an average of 15.6% of their body weight. That puts it in the same ballpark as many other promising GLP-1 treatments. The company is also studying the drug as a possible treatment for metabolic dysfunction-associated steatohepatitis, also known as MASH, a fairly common, but underdiagnosed, type of liver disease.

Altimmune is potentially sitting on a blockbuster drug that could carve out a significant share of a weight loss market that may be worth $200 billion by 2031. Even if it's not a dominant player in the market, having a solid asset like pemvidutide could lead to profitability down the road, or a possible acquisition by a larger healthcare company.

The danger in the near term is that the company may need to raise a lot of cash to fund its operations until it starts earning profits. It's a clinical-stage biopharmaceutical with only one candidate in development, and last year, it burned through $80 million in cash through its day-to-day operating activities. So dilution is a significant risk for shareholders, but their eventual payoff could be significant if pemvidutide does make it to market, as Altimmune's market cap today is below $500 million. This isn't going to be a suitable portfolio addition for all types of investors, but for those who are looking for a high-risk, high-potential-reward type of investment, it could prove to be a brilliant buy.

This biotech isn't just a "pandemic stock"

Prosper Junior Bakiny (Moderna): During the early years of the COVID-19 pandemic, we witnessed many things, including the speed at which mRNA vaccines can be developed and manufactured. Moderna, an mRNA-focused vaccine maker, became world-famous thanks to its success at developing an effective vaccine for the coronavirus.

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However, the company's revenue and earnings dropped off a cliff once vast swathes of the world's population were inoculated against the virus and the public health emergency receded. Over the past three years, Moderna's shares have shed 81% of their value, and they've fallen by 68% over the last 12 months alone.

Yet considering the company's prospects, the stock might be a bargain at current levels. While Moderna is no longer generating tens of billions of dollars in annual sales from its COVID-19 vaccine, the disease is still around, and many people, especially those at higher risk, are still choosing to get booster shots annually to protect themselves against the latest variants, just as folks do for the flu. Further, Moderna has made significant clinical progress in the past few years. Its vaccine for the respiratory syncytial virus passed phase 3 clinical trials and earned the green light from regulators.

Moderna's combination coronavirus/flu candidate also performed well in a late-stage study. And Moderna is developing an exciting personalized cancer vaccine in partnership with Merck, a pharmaceutical giant that specializes in oncology. The biotech's pipeline is full of other exciting candidates, including some vaccines for diseases where no competing vaccine has yet been brought to market.

The biotech's rapid success in a COVID-19 vaccine market where so many would-be rivals failed and its clinical progress since then speak volumes about the potential of its mRNA platform. Even though its financial results have worsened, the sell-off looks way overdone. Moderna isn't just a "pandemic stock": It could deliver excellent returns to investors who initiate positions in the company at current levels.

A ridiculously cheap pharma stock

Keith Speights (Pfizer): Pfizer's forward price-to-earnings (P/E) ratio is hovering around 8.8 -- less than half of the forward earnings multiple of 18.7 recently calculated for pharma stocks as a category by NYU's Stern School of Business.

Such a low valuation might be warranted if Pfizer's growth prospects were horrible. However, that isn't the case. Granted, the big drugmaker faces some challenges. As is the case for Moderna, Pfizer's COVID-19 product sales are much lower now than they were during the intense phases of the health crisis. The company also will lose patent exclusivity on several lucrative drugs over the next few years. But Pfizer still expects to deliver solid growth in the second half of this decade.

Thanks in part to several acquisitions, Pfizer has multiple new growth drivers in its lineup. They include migraine therapy Nurtec ODT (gained through its 2022 acquisition of Biohaven) and cancer drug Padcev (picked up via Pfizer's 2023 buyout of Seagen).

Pfizer has also invested heavily in research and development. Those efforts are paying off with new products such as multiple myeloma drug Elrexfio and respiratory syncytial virus (RSV) vaccine Abrysvo.

We can't talk about Pfizer without mentioning its dividend: At the current share price, its forward yield is 6.58%. With such a juicy dividend, Pfizer won't have to deliver much share price growth to provide attractive total returns for investors.

Don’t miss this second chance at a potentially lucrative opportunity

Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.

On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:

Nvidia:if you invested $1,000 when we doubled down in 2009,you’d have $307,378!* Apple: if you invested $1,000 when we doubled down in 2008, you’d have $40,591!* Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $512,780!*

Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.

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*Stock Advisor returns as of March 18, 2025

Keith Speights has positions in Pfizer. The Motley Fool has positions in and recommends Merck and Pfizer. The Motley Fool recommends Moderna. The Motley Fool has a disclosure policy.

Buying These Dirt-Cheap Stocks Could Be a Brilliant Move was originally published by The Motley Fool

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