One-glance verdict
Overvalued
$18.32 our estimate vs market $42.40
Wall Street consensus: $49.44 (169.9% higher than our fair-value estimate)
131% above our estimate, beyond the bull case
Fundamentals snapshot
Teva Pharmaceutical Industries Limited
TEVA · NYQ · Healthcare · Drug Manufacturers - Specialty & Generic
Current price
$42.40
52-week range
$24.01 - $43.34
Market cap
$49.47B
Balance sheet
Stretched
4.31x Stretched
Net debt $12.91B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
1 Risk
3 rewards · 1 risks
- Reward Revenue grew 834.6% last year.
- Reward Returns 6.7% on equity, ahead of 16% of its peers.
- Reward Free cash flow was positive in 10/10 years.
- Risk Stock trades 282.3% above its 5-year average P/E.
What this company does
Teva Pharmaceutical Industries Limited
Teva Pharmaceutical Industries Limited makes and sells both affordable generic medicines and specialized branded drugs for conditions like multiple sclerosis and migraine. Most of its money comes from these medicines, and how well its profit margins (the amount of money left after paying for the costs of making and selling its products) are doing is important for its overall success.
How the company got here
Teva Pharmaceutical Industries Limited was founded in 1901 in Jerusalem as a small wholesale drug business. [1, 9] Over the decades, it grew through mergers and acquisitions, becoming Israel's largest drug maker by 1976. [1, 4, 6, 9] A key turning point was gaining approval from the U.S. Food and Drug Administration (FDA) for its manufacturing plant in 1982, which paved the way for U.S. market entry. [4, 6] Teva strategically expanded through acquisitions of other pharmaceutical companies, notably in the U.S. and Europe, solidifying its position as the world's largest generic drug manufacturer. [1, 4, 6] The company has since focused on a strategy that balances its large generics business with a growing portfolio of innovative and complex medicines. [3, 10]
What it actually does
Teva Pharmaceutical Industries Limited is a global pharmaceutical company that develops, manufactures, and markets a wide range of medicines. [1, 4] It is best known for producing generic drugs, which are less expensive versions of brand-name medications that have lost their patent protection. [1, 3] Teva also develops and sells its own branded, or innovative, medicines, often focusing on specific therapeutic areas like central nervous system disorders, respiratory illnesses, and oncology. [1, 2, 15] Additionally, the company produces active pharmaceutical ingredients (APIs), which are the core components of drugs, and offers contract manufacturing services to other pharmaceutical companies. [1, 5]
Generics
This is Teva's largest business segment and the foundation of its global presence. [3, 11] Teva manufactures and sells a vast array of generic medicines in various forms, such as tablets, capsules, and injectables. [1] These are essentially copies of brand-name drugs that are no longer protected by patents, making them more affordable for patients and healthcare systems. [1, 3] The generics business provides Teva with significant revenue scale and helps ensure its manufacturing facilities are utilized efficiently. [3]
Innovative Medicines
This segment focuses on developing and marketing Teva's own branded drugs, often targeting specific medical needs. [1, 3, 15] Key areas of focus include treatments for central nervous system (CNS) disorders, such as tardive dyskinesia and Huntington's disease (with drugs like AUSTEDO), and preventive treatments for migraine (like AJOVY). [1, 2] Teva also has innovative products for respiratory conditions and oncology. [2, 15] While smaller than the generics business, this segment is a key growth driver for Teva, offering higher profit margins and more durable revenue streams. [3]
Active Pharmaceutical Ingredients (API)
Teva manufactures and sells active pharmaceutical ingredients (APIs), which are the biologically active components of a drug that produce the intended therapeutic effect. [1, 5] This business unit, known as TAPI, not only supplies Teva's internal manufacturing needs, ensuring a secure supply chain for its own products, but also sells APIs to other pharmaceutical companies. [3, 5] This segment is strategically important for Teva, contributing to its overall operational capabilities and revenue. [3]
What management is betting on now
Teva's current strategy, called "Pivot to Growth," aims to balance its established strength in generics with a focused expansion of its innovative and complex medicine portfolio. [3, 10] Management is prioritizing the growth of key innovative brands like AUSTEDO, AJOVY, and UZEDY, which target significant unmet medical needs. [1, 3, 10] The company is also investing in complex generics and biosimilars (versions of biologic drugs that are similar to existing ones), aiming to increase profit margins and drive future growth. [3, 10, 12] Teva is also working to optimize its operations, which includes modernizing its business and potentially divesting certain assets to improve efficiency and financial performance. [11, 12]
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
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
FY2026 Q3
$121.00M
Revenue
$4.39B
Net income
$233.00M
Diluted EPS
0.20
Operating cash flow
$241.00M
Free cash flow
$121.00M
Fetching…
Sources
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
Is it cheap or expensive?
Fair value $18.32 vs current price $42.40
Wall Street consensus is the average analyst price target: $49.44 (169.9% higher than our fair-value estimate).
Our most-likely fair value is $18.32 a share — about 56.8% below today's price of $42.40, so the stock currently looks expensive (overvalued).
Is it drowning in debt?
Stretched
Net debt $12.9B. Interest coverage 4.3x.
Net debt
$12.91B
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 $17.00B Interest coverage 4.31x This is the baseline the peer rows are being compared against.
Total debt $13.58B 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 $769.68M Interest coverage 13.41x +211% vs TEVA Carries about 3.1x more debt cushion than TEVA.
Total debt $3.28B 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
1 Risk
Rewards
-
Revenue grew 834.6% last year.
-
Returns 6.7% on equity, ahead of 16% of its peers.
-
Free cash flow was positive in 10/10 years.
Risks
-
Stock trades 282.3% above its 5-year average P/E.
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)
98.60x
Forward P/E
13.55x
P/B
6.20x
P/S
2.87x
EV/EBITDA
14.16x
PEG ratio
0.71x
Profitability
How much profit each dollar creates
Gross margin
53.5%
Operating margin
27.4%
Net margin
2.9%
ROE
6.7%
ROA
5.4%
Health
Liquidity and balance-sheet strength
Debt / equity
2.13x
Current ratio
0.95x
Quick ratio
0.51x
Total debt
$17.00B
Total cash
$4.08B
Growth
How the business has been compounding
Revenue TTM
$14.02B
Revenue 5Y CAGR
-44.6%
EPS TTM
0.43
EPS 5Y CAGR
—
Cash flow
How much cash the business throws off
Operating CF TTM
$1.77B
Free CF TTM
$1.15B
FCF margin
8.2%
Dividend
Shareholder payout
Yield
0.0%
Payout ratio
0.0%
Last ex-div date
2017-11-28