Amgen Inc (AMGN) stock analysis

P/E above its 5-year median

Amgen's P/E of 27.1 is above its own 5-year median of 24.1.

P/E above the industry

Amgen's P/E of 27.1 is above the Drugs median of 25.1.

EV/EBITDA above its 5-year median

Amgen's EV/EBITDA of 19.2 is above its 5-year median of 16.4.

P/B above the industry

Amgen's price-to-book of 17.63 is above the Drugs median of 2.29.

Trading above fair value

The share price of $468.11 is above our fair value estimate of $379.78.

Margin of safety under 20%

The price is 23.3% above fair value, so there is no margin of safety.

Revenue growing 10%+ a year

Revenue grew 11.8% a year over the last three fiscal years.

EPS growing under 10% a year

Diluted EPS grew 5.5% a year over the last three fiscal years.

Earnings growth accelerating

Net income grew 34.1% over the last twelve months, against a 5-year average of 1.2% a year.

Growing faster than the industry

Revenue grew 8.2% over the last twelve months; the Drugs median is 8.0%.

Guidance raised

Amgen raised its full year 2026 Total revenues outlook on Aug 4, 2026.

Gross margin improving

Gross margin was 70.9% over the last twelve months, against 66.2% a year earlier.

Return on equity over 15%

Return on equity was 78.4% over the last twelve months and averaged 102% over five years.

Return on capital over 10%

Return on invested capital was 19.5%, above the 10% that usually covers the cost of capital.

Return on equity above the industry

Amgen's return on equity of 78.4% is above the Drugs median of -58.9%.

Earnings grew over 5 years

Net income grew 1.2% a year on average over the last five fiscal years.

Net margin above its 5-year average

Net margin was 24.1% over the last twelve months, against a 5-year average of 20.9%.

Net margin above the industry

Amgen's net margin of 24.1% is above the Drugs median of -53.0%.

High debt

Debt is 376% of shareholders' equity, above the 40% we consider low.

Debt rising against equity

Debt to equity rose from 351% five years ago to 376%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 22.3% of total debt.

Interest not well covered

Operating income covers interest expense 4.8 times; we look for at least 5.

Short-term assets cover short-term debts

Current assets are 1.48 times current liabilities.

Bankruptcy risk in the grey zone

The Altman Z-score is 2.55; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Amgen paid dividends worth 2.1% of the share price over the last twelve months.

Yield below Treasuries

The 2.1% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; Amgen yields 2.1%.

Dividend not cut

The dividend per share has not fallen by more than 10% in any of the last 10 fiscal years.

Covered by earnings

Dividends take 57.1% of net income.

Covered by free cash flow

Dividends take 56.0% of free cash flow.