Wall Street Thinks Viatris Stock Will Rise 25% -- Could It Grow Even More?

For a generic drugmaker like (NASDAQ: VTRS), big spurts of growth are unlikely. The market for low-cost generic medications is competitive, and success is largely defined by maintaining strong cash flows that enable returning capital to investors. 

So when the Wall Street average estimate calls for shares to rise by 25% by this time next year, investors' ears should perk up, because business probably won't be as usual. But could this stock actually outperform the benchmark set by Wall Street under the right conditions? It's more likely than it might seem. Here's why. 

For Viatris to grow, it needs to commercialize more generic versions of medicines by proving to regulators that what it's making is equivalent to the branded editions. Because the burden of proof it needs to meet is much lower than for never-used-before novel medicines, there isn't nearly as much risk that the generics in its pipeline will fail to prove their safety and efficacy. Nor does it need to spend as much on research and development (R&D), as any clinical trials it needs to perform are of a more limited scope. Likewise, because the branded versions of its drugs have already been on the market for long enough to lose their exclusivity protections, the company can be confident that there's a market of buyers for what it's developing. And it has quite a few candidates cooking that'll likely be approved for sale within the next five years.

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Source Fool.com