Merck & Co. (MRK)
Health Care · $367B market cap · SEC CIK 0000310158
fundamentals score out of 100
Next reports on Oct 29, 2026, with analysts expecting $2.22 in earnings per share.
The case for MRK
- Generated $12.4B of free cash flow in FY2025, 19% of revenue.
- Pays a 2.9% dividend while you wait.
- Gross margin of 77% absorbs cost shocks.
- Moves less than the market (beta 0.14).
- Within 4% of its 52-week high: the trend is up.
- Up 83.4% over the past year.
The case against
- Very expensive at 115.6× earnings. Years of growth are already in the price.
- Earnings per share down 80.7%.
- Return on equity of only 7%.
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. It describes the last filing and the current price. It is not a forecast.
| Valuewhat you pay for the earnings, sales, assets and cash | 20 |
|---|---|
| Growthhow fast revenue and earnings are moving, this year and over five | 32 |
| Profitabilityhow much of the revenue becomes profit, and how much of that is cash | 38 |
| Momentumhow the price has behaved lately | 92 |
| Stabilityhow violently it moves, what it owes and what it pays you | 68 |
- Each factor except momentum is half fixed thresholds, half rank among the 59 Health Care companies.
Key numbers
| Price / earnings | 115.6× |
|---|---|
| Price / book | 7.57× |
| Price / sales | 5.5× |
| Revenue growth (YoY) | +4.6% |
| EPS growth (YoY) | -80.7% |
| Gross margin | 77% |
| Operating margin | 10% |
| Net margin | 5% |
| Return on equity | 7% |
| Debt / equity | 1.29× |
| Current ratio | 1.32 |
| Dividend yield | 2.87% |
| Beta | 0.14 |
| 52-week range | $77.58 – $156.92 |
| Position in that range | 92% of the way up |
| 3-month return | +31.3% |
| 1-year return | +83.4% |
Five years of financials, as filed
Pulled from Merck & Co.'s XBRL filings on SEC EDGAR. Italic rows are derived from the rows above.
| FY2025 | FY2024 | FY2023 | FY2022 | FY2021 | |
|---|---|---|---|---|---|
| Revenue | $65.0B | $64.2B | $60.1B | $59.3B | $48.7B |
| Net income | $18.3B | $17.1B | $365M | $14.5B | $12.3B |
| Operating cash flow | $16.5B | $21.5B | $13.0B | $19.1B | $13.1B |
| Capital expenditure | $4.1B | $3.4B | $3.9B | $4.4B | $4.4B |
| Total assets | $137B | $117B | $107B | $109B | $106B |
| Shareholder equity | $52.6B | $46.3B | $37.6B | $46.0B | $38.2B |
| Cash | $14.6B | $13.2B | $6.8B | $12.7B | $8.1B |
| Long-term debt | $46.8B | $34.5B | $33.7B | $28.7B | $30.7B |
| Free cash flow | $12.4B | $18.1B | $9.1B | $14.7B | $8.7B |
| Net margin | 28.1% | 26.7% | 0.6% | 24.5% | 25.3% |
| Diluted shares | 2.5B | 2.5B | 2.5B | 2.5B | 2.5B |
Share count is essentially flat over 4 years.
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
- Risks Related to the Company’s Business
- 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