Amgen AMGN
What does Amgen do?
Amgen is a U.S. biotechnology company that discovers, develops, manufactures and distributes medicines based on biological processes worldwide. The focus is on therapies for serious illnesses, including inflammatory and autoimmune diseases, osteoporosis, cardiovascular conditions, and cancer and blood disorders.
Amgen generates revenue mainly from prescription medicines such as Enbrel, Otezla, Prolia, Xgeva, Repatha, Nplate, Kyprolis and Evenity. Buyers are predominantly wholesalers, pharmacy chains, hospitals and government health systems. Competitively, the company faces other large pharmaceutical and biotechnology groups. Its position rests on its own research, extensive experience in biologics manufacturing and a broad portfolio of established drugs. However, copycat products, so-called biosimilars, are increasingly competing with individual core products.
Score profile
Rank vs. Drug Manufacturers - General (15 companies). 10 = top of the group, 5 = middle. Calculated from the metrics below, without AI.
Metrics compared with the industry
On profitability and quality, Amgen ranks above average in the group Drug Manufacturers - General (6.8/10). On growth, the company ranks among the best in the group Drug Manufacturers - General (8.7/10). On valuation (higher = cheaper), the stock ranks below average in the group Drug Manufacturers - General (3.4/10). On financial strength, Amgen ranks below average in the group Drug Manufacturers - General (3.4/10).
| Metric | Stock | Group median | Ranking |
|---|---|---|---|
| Forward P/E | 18.6x | 16.4x | better than 17 % |
| Trailing P/E | 27.0x | 32.3x | better than 58 % |
| PEG ratio | 2.8x | 3.3x | better than 68 % |
| EV/EBITDA | 16.6x | 13.4x | better than 23 % |
| Price/sales | 6.5x | 4.4x | better than 30 % |
| Price/book | 17.5x | 6.8x | better than 11 % |
| Revenue growth | 8.5% | 5.6% | better than 77 % |
| Earnings growth | 19.4% | -5.3% | better than 96 % |
| Gross margin | 72.5% | 74.2% | better than 37 % |
| Operating margin | 35.8% | 34.3% | better than 63 % |
| Net margin | 24.1% | 15.7% | better than 83 % |
| Return on equity | 78.4% | 20.0% | better than 90 % |
| Debt/equity | 376.3% | 119.9% | better than 10 % |
| Current ratio | 1.5x | 1.4x | better than 70 % |
| Free cash flow yield | 2.9% | 4.4% | better than 23 % |
| Dividend yield | 2.2% | 2.2% | – |
| Payout ratio | 57.6% | 60.8% | – |
| Beta | 0.42 | 0.37 | – |
Valuation: what is Amgen worth?
Two valuation approaches – a discounted cash flow model and a valuation at the industry’s median multiples – give Amgen a model range of 301.45 USD to 483.40 USD per share.
29 analysts, average rating “Hold”, average price target 429.74 USD (−7.6%).
The full DCF matrix, the reverse DCF (what growth the price implies) and scenarios are part of the Pro analysis.
What the business depends on
- Demand for established biologics in chronic indications provides recurring revenue from prescription medicines.
- Successful research and approvals of new active ingredients replace expiring products and broaden the portfolio.
- In-house biologics manufacturing and economies of scale support profitability, as do reimbursement decisions by insurers and health systems.
Risks
- Patent expirations and biosimilar competition can put significant pressure on revenue from important core products.
- Government price regulation and the negotiating pressure from payers limit pricing of medicines.
- Research projects can fail in clinical trials or in the approval process and tie up high investment.
What to look for with Amgen
The share of research and development spending in revenue is revealing, as it shows how heavily the company is investing in replacing expiring products.