One-glance verdict
Overvalued
$101.00 our estimate vs market $147.24
Wall Street consensus: $158.56 (57.0% higher than our fair-value estimate)
46% above our estimate, beyond the bull case
Fundamentals snapshot
Merck & Co., Inc.
MRK · NYQ · Healthcare · Drug Manufacturers - General
Current price
$147.24
52-week range
$82.01 - $156.92
Market cap
$363.27B
Balance sheet
Watch
16.29x Strong cushion
Net debt $46.77B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
3 Risks
3 rewards · 3 risks
- Reward Revenue grew 2.4% last year.
- Reward Returns 7.0% on equity, ahead of 25% of its peers.
- Risk Net debt grew 98.7% over 3 years.
- Risk Operating margin compressed from 30.8% to -0.2% over 3 years.
What this company does
Merck & Co., Inc.
Merck is a large healthcare company that makes medicines and vaccines for both people and animals. A significant portion of its revenue (the money a company makes from selling things) comes from its widely-used cancer drug, Keytruda, as well as its large animal health business. Because these products address critical, ongoing health needs, the company often sees steady demand.
How the company got here
Merck's story starts in Germany way back in 1668 with the purchase of a single pharmacy. The American branch, Merck & Co., was set up in 1891 and became a separate, independent U.S. company during World War I. Over the next century, its scientists made huge breakthroughs, creating the first vaccines for measles and mumps. A key moment was the 1953 merger with Sharp & Dohme, which is why the company is known as MSD outside of North America. More recently, the company developed Keytruda, a revolutionary cancer therapy that has become one of the world's best-selling drugs.
What it actually does
Merck is a global healthcare company that discovers, develops, and sells medicines and vaccines to improve the health of people and animals. You would encounter its products at a doctor's office or a hospital, not on a store shelf. Its most well-known products include Keytruda, a major cancer treatment, and Gardasil, a vaccine that helps protect against the HPV virus. Beyond these, the company makes a wide range of prescription products for other serious illnesses, from infectious diseases to diabetes, as well as products for the health of pets and farm animals.
Pharmaceutical
This is Merck's largest business by far, making up the vast majority of its revenue (the total money it brings in from sales). This segment creates medicines and vaccines for humans, which it sells to drug wholesalers, hospitals, and government agencies. Its biggest focus areas are oncology (the treatment of cancer), with its blockbuster drug Keytruda, and vaccines like Gardasil. It also develops and sells important treatments for hospitals to use in acute care situations, as well as medicines for other conditions like diabetes.
Animal Health
This is a smaller but still significant part of the company, providing a wide range of products for the well-being of animals. It makes medicines and vaccines for both companion animals (pets like dogs and cats) and livestock (farm animals like cattle and poultry). Customers are typically veterinarians, farmers, and pet owners who use these products to prevent and treat diseases. This division also offers technology, such as identification and monitoring systems, to help manage the health of large herds of animals.
What management is betting on now
Management's main focus is preparing for the future when its top-selling cancer drug, Keytruda, eventually loses its patent protection. Their strategy is to build up a strong pipeline (the group of new drugs currently in development) to create new sources of growth. To do this, they are heavily investing in both their own research and development (R&D, the process of creating new medicines) and in making deals with other companies to acquire promising new drugs. The company has stated it will follow the best science into any disease area, not just cancer, and remains committed to its historic leadership in developing new vaccines.
Price history
How the share price has moved
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Loading price history…
Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q3
$8.51B
FY2024 Q4
$2.51B
FY2025 Q1
$1.17B
FY2025 Q2
$2.53B
FY2025 Q3
$6.83B
FY2025 Q4
$1.82B
FY2026 Q1
$2.93B
FY2026 Q2
$4.48B
Revenue
$16.61B
Net income
$-1.33B
Diluted EPS
-0.54
Operating cash flow
$5.37B
Free cash flow
$4.48B
Fetching…
Sources
Revenue
$16.29B
Net income
$-4.24B
Diluted EPS
-1.72
Operating cash flow
$3.92B
Free cash flow
$2.93B
Fetching…
Sources
Revenue
$16.40B
Net income
$2.96B
Diluted EPS
1.19
Operating cash flow
$2.86B
Free cash flow
$1.82B
Fetching…
Sources
Revenue
$17.28B
Net income
$5.79B
Diluted EPS
2.32
Operating cash flow
$7.82B
Free cash flow
$6.83B
Fetching…
Sources
Revenue
$15.81B
Net income
$4.43B
Diluted EPS
1.76
Operating cash flow
$3.29B
Free cash flow
$2.53B
Fetching…
Sources
Revenue
$15.53B
Net income
$5.08B
Diluted EPS
2.01
Operating cash flow
$2.50B
Free cash flow
$1.17B
Fetching…
Sources
Revenue
$15.62B
Net income
$3.74B
Diluted EPS
1.49
Operating cash flow
$3.45B
Free cash flow
$2.51B
Fetching…
Sources
Revenue
$16.66B
Net income
$3.16B
Diluted EPS
1.24
Operating cash flow
$9.29B
Free cash flow
$8.51B
Fetching…
Sources
Is it cheap or expensive?
Fair value $101.00 vs current price $147.24
Wall Street consensus is the average analyst price target: $158.56 (57.0% higher than our fair-value estimate).
Our most-likely fair value is $101.00 a share — about 31.4% below today's price of $147.24, so the stock currently looks expensive (overvalued).
Is it drowning in debt?
Watch
Net debt $46.8B. Interest coverage 16.3x.
Net debt
$46.77B
Interest coverage
16.29x
Merck & Co., Inc.'s profit covers its interest bill about 16.3 times over. which is stronger than most peers shown here.
Watch
Worse cushion
Baseline
Better cushion
MRK
BASELINE
Merck & Co., Inc.
Total debt $53.91B Interest coverage 16.29x This is the baseline the peer rows are being compared against.
Total debt $63.48B Interest coverage 6.52x -60% vs MRK Carries about 2.5x less debt cushion than MRK.
Total debt $49.04B Interest coverage 26.36x +62% vs MRK Carries about 1.6x more debt cushion than MRK.
Total debt $45.05B Interest coverage 7.26x -55% vs MRK Carries about 2.2x less debt cushion than MRK.
Total debt $70.88B Interest coverage 6.94x -57% vs MRK Carries about 2.3x less debt cushion than MRK.
Total debt $54.91B Interest coverage 38.04x +134% vs MRK Carries about 2.3x more debt cushion than MRK.
What you should know
The case for and against MRK
3 Rewards
3 Risks
Rewards
-
Revenue grew 2.4% last year.
-
Returns 7.0% on equity, ahead of 25% of its peers.
-
Free cash flow was positive in 10/10 years.
Risks
-
Net debt grew 98.7% over 3 years.
-
Operating margin compressed from 30.8% to -0.2% over 3 years.
-
Insider ownership is only 0.1% (peer median: 0.1%).
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
116.86x
Forward P/E
15.90x
P/B
8.67x
P/S
5.46x
EV/EBITDA
14.20x
PEG ratio
2.80x
Profitability
How much profit each dollar creates
Gross margin
75.9%
Operating margin
-0.2%
Net margin
4.8%
ROE
7.0%
ROA
11.9%
Health
Liquidity and balance-sheet strength
Debt / equity
1.28x
Current ratio
1.32x
Quick ratio
0.74x
Total debt
$53.91B
Total cash
$7.14B
Growth
How the business has been compounding
Revenue TTM
$66.57B
Revenue 5Y CAGR
7.5%
EPS TTM
1.26
EPS 5Y CAGR
8.4%
Cash flow
How much cash the business throws off
Operating CF TTM
$19.97B
Free CF TTM
$12.36B
FCF margin
18.6%
Dividend
Shareholder payout
Yield
2.3%
Payout ratio
266.7%
Last ex-div date
2026-09-15