We recently published a list of 10 Best Very Cheap Stocks To Buy Right Now. In this article, we are going to take a look at where Merck & Co., Inc. (NYSE:MRK) stands against other best very cheap stocks to buy right now.
The stock market had a mixed start to 2025 as the Chinese Deepseek AI model has put the U.S. AI giants on the back foot. However, the tech-heavy NASDAQ 100 index made a recovery after taking a hit and has surged over 5% year-to-date. In addition, the S&P 500 index has gained just over 4% so far in 2025.
READ ALSO: 10 Best Cheap Technology Stocks To Buy According to Analysts
Goldman Sachs Research’s chief US equity strategist, David Kostin, expects the US tariffs to negatively impact the S&P 500 EPS in 2025. Kostin cited that every five-percentage-point increase in the US tariff rate will reduce S&P 500 EPS by roughly 1-2%.
If the U.S. administration continues with the proposed tariff rates, a 25% tariff on imported goods from Mexico and Canada and an additional 10% tariff on imports from China would reduce S&P 500 EPS forecasts by approximately 2-3%, as per Goldman’s Research.
With the potential market risks and tariff threat from the Trump administration, cheap stocks with strong fundamentals can be a good option for investment.
At first glance, the market may seem overvalued, with the S&P 500 trading close to all-time highs, driven by tech giants and leading consumer stocks. However, some stocks have missed the broader market rally amid temporary challenges. These stocks have attractive forward P/E ratios and proven growth records.
Our Methodology
We used the Finviz screener to compile a list of 30 cheap stocks with a forward P/E ratio of under 15. We shortlisted the 10 best very cheap stocks to buy now based on the highest potential upside according to average analyst estimate, as of February 17. The very cheap stocks are ranked in ascending order of the average analyst upside.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A close-up of a person’s hand holding a bottle of pharmaceuticals.
Merck & Co., Inc. (NYSE:MRK)
P/E Ratio: 9.35
Average Analysts Upside: 38.54%
Merck & Co., Inc. (NYSE:MRK) is a global healthcare company with two segments: pharmaceutical and Animal Health. Over the last six months, MRK shares have plunged by just under 27% due to the company’s weaker-than-expected 2025 revenue guidance. Projected revenue of $64.1 billion to $65.6 billion fell short of analyst estimates of $67.31 billion.
The company has been struggling with its HPV vaccine, Gardasil. Merck has temporarily halted shipments of Gardasil to China until mid-2025, negatively impacting its revenue outlook. The Chinese market remains a key growth driver for many pharmaceutical companies, but Merck’s challenges in the region continue to negatively impact its stock.
Despite these short-term challenges, Merck & Co., Inc. (NYSE:MRK) remains resilient and delivered a robust performance in 2024. In FY2024, Merck posted a revenue of $15.62 billion, beating estimates of $15.49 billion. The company’s innovative portfolio remains a key driver for MRK, with Keytruda performing exceptionally well. Moreover, the launch of Winrevair further bolstered revenue growth in 2024. The company’s Animal Health division also posted impressive results, achieving 13% sales growth in 2024.
GreensKeeper Asset Management, an investment management company, released its Q3 investor letter. Here is what the fund said about MRK in the investor letter:
“Merck & Co., Inc. (NYSE:MRK) was our second-largest detractor this quarter, declining -8.3%. MRK’s leading HPV vaccine, GARDASIL 9, faced challenges internationally due to inventory buildup within its Chinese distributor, which is expected to reduce shipments for the remainder of 2024. Despite this short-term impact, the long-term outlook for GARDASIL 9 remains promising. Meanwhile, the company’s $27 billion Keytruda cancer juggernaut continues to grow at a healthy clip, powering earnings growth.”
Overall, MRK ranks 1st on our list of best very cheap stocks to buy right now. While we acknowledge the potential of MRK to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than MRK but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
