* Note: Prices are in Million (M) USD.
Description:
Amgen Inc. (formerly Applied Molecular Genetics Inc.) is an American multinational biopharmaceutical company headquartered in Thousand Oaks, California. Focused on molecular biology and biochemistry, its goal is to provide a healthcare business based on recombinant DNA technology.
These criteria used Company's Cash, EBITDA and Debt balance to determines its fair value:
Cash : $8,028 M
Debt : $56,204 M
EBITDA : $15,899 M
Net Debt (Debt - Cash): $48,176 M
Since Net Debt is covered by EBITDA within 3 years, 1 points assigned.
This criteria used industry in which company operates:
Sector: Healthcare
Industry: Biotechnology
Based on industry, 5 points assigned.
This criteria used Company's Price To Earning (P/E) Ratio to determines its fair value:
Forward PE Ratio: 12.93
Since Forward PE Ratio is less than 15, 5 points assigned.
This criteria used Company's ability to convert Sales into free cash flow to determine fair value:
Using last 20 overlapping fiscal years (max 20).Average Free Cash Flow: $7,196 M
Average Revenue: $20,585 M
Revenue Converted To Free Cash Flow (%): 35.0%
Since Free Cash Flow (FCF) to Revenue percentage is greater than 25, 5 points assigned.
This criteria used company's growth potential to calculate its fair value:
Latest Revenue (2024-12-31): $33,424 M
Revenue 4 Years Ago (2020-12-31): $25,424 M
Last 5 Years Average Revenue Growth: 6%
Since Revenue Growth is between 5 - 10, 2 points assigned.
This criteria used Company's ability to buy back its own share:
Latest Share Count (2024-12-31): $541 M
Share Count 5 Years Ago (2020-12-31): $590 M
Company is buying back its own shares, 3 points assigned.
This criteria used Company's dividend payout ratio to determine its fair value:
Next Year Earnings Per Share (EPS): $22.67
Trailing 12-Month Earnings Per Share (EPS): $21.50
Average Earnings Per Share (EPS): $22.09
Dividend Per Share (DPS): $9
Payout Ratio: 42%
Dividend Yield: 3%
Since company Payout Ratio is less than 50, 2 points assigned.
Since Dividend Yield is greater than 3, 3 points assigned.
This criteria used Company's Return On Equity (ROE%) to determine its fair value:
Using last 20 valid ROE years (max 20).Average ROE: 46.2%
Since Average ROE is greater than 20, 5 points assigned.
This criteria used Company's current price to its 52 week low price to determines its fair value:
Current Price: $286
52-Week Low: $249
Threshold Price (15% Above 52-Week Low): $286
Since Current price is within 15% threshold, 5 points assigned.
This criteria used Company's Market Cap to determines its fair value:
Market Capitalization: $153,272 M
Since Market Cap is between 100B - 500B, 3 points assigned.
% Exposure to Total Portfolio
Based on the market cap, we recommend do not exceed 4% exposure of Total Portfolio.
Value-Trade has assigned 39 points to above Amgen Inc (AMGN) stock.
Heads up: One or more P/E inputs look exaggerated and may skew the blend.
• RCFC Based PE
37.97 (>2× median)
• ROE Based PE
46.99 (>2× median)
Further research is recommended; please use your own due diligence.In such cases, multiplying earnings by the long-run average P/E typically gives a closer, more reliable fair value.
Rule of thumb: Last 20 Years Avg P/E (14.43)
× EPS ($22.09) = $318.69.
Last 20 Years Avg PE 14.43, Fair Value PE 30, Industry Based PE 15, Growth Based PE 6, RCFC Based PE 37.97, ROE Based PE 46.99, Risk-Free Anchored PE (25% MoS) 17.08. Based on these 7 values, average assigned is 23.92. Value-Trades has assined P/E value 23.92. Since an average (Current Year EPS + Next Year EPS) earning per share is $22.085.
The fair value of Amgen Inc (AMGN) stock should be (23.92 x $22.085) = $528.38.
