Merck & Co. (MRK)

Health Care · $367B market cap · SEC CIK 0000310158

Next reports on Feb 2, 2027, after the close, with analysts expecting $1.76 in earnings per share.

52-week range $85.24 to $156.92. 6% below its 52-week high and 74% above its low.

The case for MRK

• Generated $12.4B of free cash flow in FY2025, 19% of revenue.
• Gross margin of 77% absorbs cost shocks.
• Moves less than the market (beta 0.12).
• Up 72.4% over the past year.

The case against

• Expensive for its growth: 149.5× earnings, where 12% a year of growth would justify about 26×.
• Earnings per share down 87.0%.
• Return on equity of only 5%.
• Net margin of 3.6% leaves very little room for error.

What the score is made of

Each factor is half a curve over reported figures and half a rank among the other Health Care companies (momentum is judged against fixed thresholds only), and the five are blended by weight. The score is where that blend places it in the S&P 500. It describes the last filing and the current price. It is not a forecast.

• Its dividend figures disagree with each other (a 2.9% yield against about 0.3% implied by its payout ratio and P/E), so the dividend is not counted.
• Each factor except momentum is half fixed thresholds, half rank among the 59 Health Care companies.

The financials

The financials, five years deep

Pulled from Merck & Co.'s XBRL filings on SEC EDGAR. Italic rows are worked out from the others.

What Merck & Co. says it does

Merck & Co., Inc. (Merck or the Company) is a global health care company that delivers innovative health solutions through its prescription medicines, including biologic therapies, vaccines and animal health products. The Company’s operations are principally managed on a product basis and include two operating segments, Pharmaceutical and Animal Health, both of which are reportable segments. The Pharmaceutical segment includes human health pharmaceutical and vaccine products. Human health pharmaceutical products consist of therapeutic and preventive agents, generally sold by prescription, for the treatment of human disorders. The Company sells these human health pharmaceutical products primarily to drug wholesalers and retailers, hospitals, government agencies, and managed health care providers such as health maintenance organizations, pharmacy benefit managers and other institutions. Human health vaccine products consist of preventive…

Risk factors MRK lists in its 10-K

• The Company is dependent on its patent rights, and if its patent rights are invalidated or circumvented, its business could be materially adversely affected
• As the Company’s products lose market exclusivity, the Company generally experiences a significant and rapid loss of sales from those products
• The Company’s success is dependent on the successful development and marketing of new products, which are subject to substantial risks
• The Company faces continued pricing pressure with respect to its products in the public and private sectors
• Unfavorable or uncertain economic conditions, together with cost-reduction measures being taken by the U.S. and other countries, could negatively affect the Company’s operating results
• The Company faces intense competition from both lower cost generic and biosimilar products and competitors’ products
• The Company has significant global operations, which expose it to additional risks, and any adverse event could have a material adverse effect on the Company’s results of operations, cash flows, financial condition, and prospects
• Climate change or legal, regulatory or market measures to address climate change may negatively affect the Company’s business, results of operations, cash flows, financial condition, and prospects
• Environmental, social and governance matters may impact the Company’s business and reputation
• Failure to attract and retain highly qualified personnel could affect the Company’s ability to successfully develop and commercialize products
• The Company may experience difficulties and delays in manufacturing certain of its products, including vaccines
• The Company’s business in China experienced significantly lower sales of
• 9 in 2025 and the Company expects that sales of
• 9 in China will not materially increase in 2026. As a consequence of the reduced sales of
• the Company’s business in China declined significantly
• The Company may not be able to realize the expected benefits of its investments in emerging markets
• The Company is exposed to market risk from fluctuations in currency exchange rates and interest rates
• Pharmaceutical products can develop unexpected safety or efficacy concerns
• Reliance on third-party relationships and outsourcing arrangements could materially adversely affect the Company’s business
• Negative events in the animal health industry could have a material adverse effect on future results of operations and financial condition of the Company or its Animal Health business
• Biologics and vaccines carry unique risks and uncertainties, which could have a material adverse effect on the Company’s future results of operations, cash flows, financial condition, and prospects
• The health care industry in the U.S. has been, and will continue to be, subject to increasing regulation and political action
• The Company’s products, including products in development, cannot be marketed unless the Company obtains and maintains regulatory approval or authorization
• Developments following regulatory approval or authorization may adversely affect sales of the Company’s products
• The Company is subject to a variety of U.S. and international laws and regulations
• The Company is subject to evolving and complex tax laws, which may result in additional liabilities that may affect results of operations and financial condition
• Adverse outcomes in current or future legal matters could negatively affect the Company’s business
• Product liability insurance for products may be limited, cost prohibitive or unavailable
• The Company is increasing its use of artificial intelligence (AI) systems to automate processes, analyze data, and support decision-making, which poses inherent risks
• Social media and mobile messaging platforms present risks and challenges
• Cautionary Factors that May Affect Future Results

Filings

Other Health Care companies