One-glance verdict
Overvalued
$9.21 our estimate vs market $39.19
Wall Street consensus: $44.00 (377.8% higher than our fair-value estimate)
326% above our estimate, beyond the bull case
Fundamentals snapshot
Teva Pharmaceutical Industries Limited
TEVA · NYQ · Healthcare · Drug Manufacturers - Specialty & Generic
Current price
$39.19
52-week range
$18.47 - $40.79
Market cap
$45.71B
Balance sheet
Stretched
4.31x Stretched
Net debt $13.24B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
2 Risks
3 rewards · 2 risks
- Reward Revenue grew 840.3% last year.
- Reward Returns 9.7% on equity, ahead of 50% of its peers.
- Risk Stock trades 153.2% above its 5-year average P/E.
- Risk Operating margin compressed from 18.0% to 4.0% over 3 years.
What this company does
Teva Pharmaceutical Industries Limited
Teva Pharmaceutical is one of the world's largest makers of generic medicines (affordable, copycat versions of brand-name drugs whose exclusive selling rights have expired). While these drugs provide a huge volume of sales, the company also makes significant money from its own unique specialty drugs for treating complex conditions like multiple sclerosis and migraines. This balance is key, as the high-volume generics provide steady business while the specialty drugs can bring in higher profits.
How the company got here
Teva began in 1901 in Jerusalem as a small business that distributed imported medicines. Over many decades, it grew by making its own drugs and acquiring other pharmaceutical companies, which expanded its expertise and market reach. A major turning point was the U.S. passing a law in 1984 that created the modern market for generic drugs (less expensive copies of brand-name medicines whose patents have expired), which Teva entered and eventually came to lead globally. The company also developed its own successful innovative medicine for multiple sclerosis called Copaxone, which for a time was a major source of profit.
What it actually does
Teva is a giant in the pharmaceutical world, best known as the world's largest maker of generic drugs. Think of them as the leading producer of affordable, copycat versions of well-known prescription medicines once the original patent (a form of legal protection for an invention) is no longer in effect. Beyond generics, Teva also develops and sells its own unique, patented drugs for specific medical conditions, particularly in brain-related and respiratory illnesses. They also sell everyday health products you can buy without a prescription, like vitamins and cold remedies.
Generic Medicines
This is Teva's largest and most well-known business, forming the foundation of the company. It produces more affordable versions of brand-name prescription drugs after their patents expire, covering a vast range of illnesses. Pharmacies, hospitals, and healthcare systems buy these generics in large quantities to save money for themselves and for patients. This high-volume, lower-price business is a major source of Teva's revenue (the total money a company brings in from sales).
Innovative Medicines
This part of the company focuses on developing and selling unique, branded drugs that Teva itself researched and patented. These medicines are not copies but new treatments for specific, often complex, health problems, with a focus on conditions of the central nervous system like migraine (AJOVY) and movement disorders (AUSTEDO). Because these drugs are protected by patents, they can be sold at a higher price than generics and represent a key area of growth and profitability for the company. Customers are patients who receive prescriptions from their doctors, with the cost often covered by health insurance.
Price history
How the share price has moved
—
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
$545.00M
FY2024 Q4
$446.00M
FY2025 Q1
$-232.00M
FY2025 Q2
$131.00M
FY2025 Q3
$233.00M
FY2025 Q4
$1.02B
FY2026 Q1
$-208.00M
FY2026 Q2
$307.00M
Revenue
$4.14B
Net income
$-576.00M
Diluted EPS
-0.49
Operating cash flow
$411.00M
Free cash flow
$307.00M
Fetching…
Sources
Revenue
$3.98B
Net income
$369.00M
Diluted EPS
0.31
Operating cash flow
$-40.00M
Free cash flow
$-208.00M
Fetching…
Sources
Revenue
$1.50B
Net income
$481.00M
Diluted EPS
0.42
Operating cash flow
$1.16B
Free cash flow
$1.02B
Fetching…
Sources
Revenue
$4.48B
Net income
$433.00M
Diluted EPS
0.37
Operating cash flow
$369.00M
Free cash flow
$233.00M
Fetching…
Sources
Revenue
$4.18B
Net income
$282.00M
Diluted EPS
0.24
Operating cash flow
$227.00M
Free cash flow
$131.00M
Fetching…
Sources
Revenue
$3.89B
Net income
$214.00M
Diluted EPS
0.18
Operating cash flow
$-105.00M
Free cash flow
$-232.00M
Fetching…
Sources
Revenue
$4.23B
Net income
$-217.00M
Diluted EPS
-0.19
Operating cash flow
$575.00M
Free cash flow
$446.00M
Fetching…
Sources
Revenue
$4.33B
Net income
$-437.00M
Diluted EPS
-0.39
Operating cash flow
$693.00M
Free cash flow
$545.00M
Fetching…
Sources
Is it cheap or expensive?
Fair value $9.21 vs current price $39.19
Wall Street consensus is the average analyst price target: $44.00 (377.8% higher than our fair-value estimate).
Our most-likely fair value is $9.21 a share — about 76.5% below today's price of $39.19, so the stock currently looks expensive (overvalued).
Is it drowning in debt?
Stretched
Net debt $13.2B. Interest coverage 4.3x.
Net debt
$13.24B
Interest coverage
4.31x
Teva Pharmaceutical Industries Limited's profit covers its interest bill about 4.3 times over. which is stronger than most peers shown here and 1 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Stretched
Worse cushion
Baseline
Better cushion
TEVA
BASELINE
Teva Pharmaceutical Industries Limited
Total debt $16.89B Interest coverage 4.31x This is the baseline the peer rows are being compared against.
Total debt $13.62B Interest coverage 0.54x -88% vs TEVA Carries about 8.0x less debt cushion than TEVA.
Total debt $6.20B Interest coverage 6.48x +50% vs TEVA Carries about 1.5x more debt cushion than TEVA.
Total debt $750.91M Interest coverage 13.41x +211% vs TEVA Carries about 3.1x more debt cushion than TEVA.
Total debt $2.79B Interest coverage 1.65x -62% vs TEVA Carries about 2.6x less debt cushion than TEVA.
Total debt $8.55B Interest coverage 2.43x -44% vs TEVA Carries about 1.8x less debt cushion than TEVA.
What you should know
The case for and against TEVA
3 Rewards
2 Risks
Rewards
-
Revenue grew 840.3% last year.
-
Returns 9.7% on equity, ahead of 50% of its peers.
-
Free cash flow was positive in 10/10 years.
Risks
-
Stock trades 153.2% above its 5-year average P/E.
-
Operating margin compressed from 18.0% to 4.0% over 3 years.
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)
65.32x
Forward P/E
12.88x
P/B
5.89x
P/S
2.64x
EV/EBITDA
13.80x
PEG ratio
0.71x
Profitability
How much profit each dollar creates
Gross margin
52.5%
Operating margin
4.0%
Net margin
4.1%
ROE
9.7%
ROA
5.1%
Health
Liquidity and balance-sheet strength
Debt / equity
2.18x
Current ratio
0.88x
Quick ratio
0.46x
Total debt
$16.89B
Total cash
$3.66B
Growth
How the business has been compounding
Revenue TTM
$14.10B
Revenue 5Y CAGR
-44.6%
EPS TTM
0.60
EPS 5Y CAGR
—
Cash flow
How much cash the business throws off
Operating CF TTM
$1.90B
Free CF TTM
$1.15B
FCF margin
8.1%
Dividend
Shareholder payout
Yield
—
Payout ratio
0.0%
Last ex-div date
2017-11-28