NYSE: MRK · Pharmaceuticals
Merck & Co.
Merck, based in Rahway, New Jersey, is a global health care company selling prescription medicines, vaccines and animal health products. 2025 sales were $65,011 million: Pharmaceutical $58,142 million — dominated by the cancer immunotherapy Keytruda/Keytruda Qlex ($31,680 million, about half of total sales) and the HPV vaccine Gardasil ($5,233 million, down from $8,583 million on sharply lower sales in China) — and Animal Health $6,354 million. Net income was $18,254 million. Merck expects Keytruda to face biosimilar competition between 2028 and 2029 and is adding products through acquisitions: Verona Pharma (Ohtuvayre for COPD, $10.4 billion, 2025) and Cidara Therapeutics (long-acting influenza antiviral, about $9.2 billion, closed January 2026). It spun off Organon in 2021 and employs about 75,000 people.
Last updated
Analysis last edited: October 30, 2026 · Financial data fetched: October 30, 2026 12:51 (SEC EDGAR) · Source 10-K filed: February 24, 2026
Built on10-K FY2025 · filed 2026-02-2410-Q (quarter ended 2026-09-30) · filed 2026-11-04Proxy statement (2026)
Next update expectedAfter FY2026’s 10-K is filed (roughly 60–90 days after fiscal year end (sooner for larger filers)), financials and analysis will be refreshed.
01
At a glanceFrom SEC data
Eight headline measures, each placed among the companies covered on this site.
- Revenue growthCAGRSmooths out year-to-year swings into "grew X% a year on average." Makes growth pace comparable across companies of very different sizes.
- 9.4%
- Operating marginOperating marginHow many cents of operating profit are left per dollar of revenue. Reflects pricing power and cost structure.
- —
- ROIC minus WACCROIC − WACC spreadThe difference between ROIC and WACC. Consistently positive implies value creation; consistently negative implies value destruction.
- —
- Net debt ÷ EBITDAEBITDAOperating income with D&A added back. A rough proxy for cash-generating power that’s less distorted by capital intensity, depreciation method, or financing/tax differences than net income.
- —
- Cash conversionOperating CF ÷ net income (cash conversion)How much of reported profit shows up as actual cash. 1x or higher means profit is backed by cash.
- 0.90x
- Dividend raisesDividend per shareTotal annual dividend paid per share (sum of all declared payments for the year).
- 5 of 5
- P/E todayP/EShare price ÷ EPS — how many years of current earnings the stock price represents. This site uses the period-end figure as reported in the filing.
- 148.0x
- Betaβ (beta)How much a stock moves, on average, for a 1% move in the overall market. Above 1 means more volatile than the market, which raises the return shareholders require. This site computes it from about 2.5 years (roughly 130 weeks) of weekly returns, built from Yahoo Finance daily prices, regressed against an S&P 500 ETF (SPY) as the market proxy, then applies the well-known long-run mean-reversion adjustment (0.67 × β + 0.33) as the WACC default.
- 0.53
Higher than 59% of 372 non-financial companies
Average yearly growth over the years shown
Latest fiscal year (FY2025)
Return on capital above (or below) its estimated cost
Below 0 means more cash than debt
Higher than 6% of 349 non-financial companies
Operating cash flow ÷ net income
Years the dividend per share rose, of the last 5
Latest close 2026-11-04; trailing 12 months to 2026-09-30
Above 1 = moves more than the market
Each marker shows where this company sits among the non-financial companies covered on this site, not all listed companies (left = lowest, right = highest). A high position is not automatically good — for net debt ÷ EBITDA, higher means more debt. Details and formulas are in the sections below and in How to read this.
02
Valuation todayFrom SEC data
Price-based measures at the latest close, next to the same measures at the last fiscal year-end.
Share price$146.66close on 2026-11-04
Market cap$362.93B
- P/EP/EShare price ÷ EPS — how many years of current earnings the stock price represents. This site uses the period-end figure as reported in the filing. today
- 148.0x
- P/BP/BShare price ÷ book value per share. Below 1x means the market values the company below its accounting net worth. This site uses the closing price nearest the fiscal year-end and highlights sub-1x readings. today
- 6.9x
- EV/EBITDAEV/EBITDAEnterprise value (≈ market cap + interest-bearing debt − cash) as a multiple of EBITDA — roughly, "how many years of EBITDA to buy the whole company." Lower is generally viewed as cheaper, and it’s more comparable than P/E across companies with different debt loads or depreciation policies. This site excludes noncontrolling interests from the EV calculation. today
- —
- FCF yieldFree cash flow (FCF)Operating CF minus capital expenditures — cash generated by the business after funding its own investment, available for dividends, buybacks, acquisitions, or debt paydown. Acquisitions and securities purchases (also in investing CF) are not subtracted, so FCF can be positive in a year when total investing CF exceeds operating CF. today
- 3.4%
- Dividend yieldDividend per shareTotal annual dividend paid per share (sum of all declared payments for the year). today
- 2.2%
At FY2025 year-end: 14.5x
Earnings: trailing 12 months to 2026-09-30
At FY2025 year-end: 5.0x
Book value at FY2025 year-end
At FY2025 year-end: —
EBITDA for FY2025
At FY2025 year-end: 4.7%
Free cash flow for FY2025
Dividends per share for FY2025
“Today” uses the latest closing price (2026-11-04, Yahoo Finance daily closing prices) and shares outstanding at the last fiscal year-end. The rest of this page — including the financial table and ROIC vs. WACC — uses fiscal year-end prices. These are reference figures, not a judgment of whether the stock is cheap or expensive.
03
What changed since last earningsFrom SEC data
The latest reported quarter against the same quarter a year earlier, the balance sheet against the previous quarter-end, and what management said in its latest earnings release.
Quarter ended Sep 30, 2026.
- Revenue$17.28B → $18.09B (vs. a year earlier)↑ +4.7%$17.28B → $18.09B (vs. a year earlier)
- Net income$5.79B → $5.07B (vs. a year earlier)↓ −12.4%$5.79B → $5.07B (vs. a year earlier)
- Diluted EPS$2.32 → $2.04 (vs. a year earlier)↓ −12.1%$2.32 → $2.04 (vs. a year earlier)
- Cash$6.85B → $9.55B (vs. previous quarter-end)↑ +39.4%$6.85B → $9.55B (vs. previous quarter-end)
- Long-term debt$51.08B → $49.69B (vs. previous quarter-end)↓ −2.7%$51.08B → $49.69B (vs. previous quarter-end)
Source: Form 10-Q ↗ (SEC XBRL). Long-term debt is the tagged long-term debt figure and leaves out short-term borrowings.
From the earnings release of Oct 29, 2026.
Management outlook ↑ Raised
Narrowed and raised the midpoint of its worldwide sales range. Source sentence
Narrows and Raises the Midpoint of Worldwide Sales Range;
Key changes
Gross margin 72.9%. Source sentence
Gross margin was 72.9% for the third quarter of
Q3 EPS included a $0.12 one-time charge. Source sentence
EPS in the third quarter of 2026 include a one-time charge of $0.12 per share related to a global license agreement with SciBrunch Therapeutics
Written by AI. A line appears only if its figures and direction match the quoted sentence, which an automatic check confirms. Companies' outlooks are their own and may not be met. Read the release ↗
04
Company profileFrom SEC dataShow
- Legal name
- Merck & Co., Inc.
- Headquarters
- RAHWAY, NJ
- Incorporated in
- New Jersey
- Fiscal year end
- 12/31
- Exchange & ticker
- NYSE: MRK
- Industry
- Pharmaceuticals
- CIK
- 310158
- Website
- https://www.merck.com/ ↗
Workforce (as of FY2025 year-end)
Employees
75,000
Source: Form 10-K (FY2025) cover page and business description
05
Earnings calendarFrom SEC dataShow
When the company reports each quarter: the quarter-end date, the day results were released, and when the 10-Q or 10-K was filed.
Next report
Q4 FY2026
Quarter end: December 2026. In past years, Q4 results were released 32–35 days after quarter end (Feb 3, 2026; Feb 4, 2025; Feb 1, 2024). No date has been announced in the sources this site uses.
Reporting pattern
- Fiscal year ends around December 31.
- Reports four times a year: three quarterly reports (10-Q) and an annual report (10-K) for Q4.
- Earnings releases came 24–35 days after quarter end over the last 12 quarters.
| Quarter | Quarter ended | Earnings release (8-K) | Report filed (10-Q / 10-K) |
|---|---|---|---|
| Q3 FY2026 | Sep 30, 2026 | Oct 29, 2026 (+29 days) | Nov 4, 2026 10-Q (+35 days) |
| Q2 FY2026 | Jun 30, 2026 | Aug 4, 2026 (+35 days) | Aug 7, 2026 10-Q (+38 days) |
| Q1 FY2026 | Mar 31, 2026 | Apr 30, 2026 (+30 days) | May 4, 2026 10-Q (+34 days) |
| Q4 FY2025 | Dec 31, 2025 | Feb 3, 2026 (+34 days) | Feb 24, 2026 10-K (+55 days) |
| Q3 FY2025 | Sep 30, 2025 | Oct 30, 2025 (+30 days) | Nov 5, 2025 10-Q (+36 days) |
| Q2 FY2025 | Jun 30, 2025 | Jul 29, 2025 (+29 days) | Aug 5, 2025 10-Q (+36 days) |
| Q1 FY2025 | Mar 31, 2025 | Apr 24, 2025 (+24 days) | May 2, 2025 10-Q (+32 days) |
| Q4 FY2024 | Dec 31, 2024 | Feb 4, 2025 (+35 days) | Feb 25, 2025 10-K (+56 days) |
| Q3 FY2024 | Sep 30, 2024 | Oct 31, 2024 (+31 days) | Nov 6, 2024 10-Q (+37 days) |
| Q2 FY2024 | Jun 30, 2024 | Jul 30, 2024 (+30 days) | Aug 5, 2024 10-Q (+36 days) |
| Q1 FY2024 | Mar 31, 2024 | Apr 25, 2024 (+25 days) | May 3, 2024 10-Q (+33 days) |
| Q4 FY2023 | Dec 31, 2023 | Feb 1, 2024 (+32 days) | Feb 26, 2024 10-K (+57 days) |
Source: SEC EDGAR filing history. Release dates are the dates the earnings release was furnished to the SEC on Form 8-K (Item 2.02), which is normally the day results are announced. For a quarter whose 10-Q or 10-K isn’t filed yet, the date is the latest Item 2.02 8-K since the previous report, which may be a preliminary or other results-related update. Fiscal years are labeled by the calendar year in which they end.
06
Flagship products & servicesSite analysis
Pharmaceutical
Keytruda / Keytruda Qlex
Anti-PD-1 cancer immunotherapy; $31,680M in 2025.
Pharmaceutical
Gardasil / Gardasil 9
HPV vaccines; $5,233M in 2025.
Pharmaceutical
Other vaccines and medicines
Januvia/Janumet, ProQuad/M-M-R II/Varivax, Bridion, Winrevair, Capvaxive, Ohtuvayre and alliance revenue from Lynparza.
Animal Health
Livestock and companion animal products
Livestock $3,896M and companion animal $2,458M in 2025.
From the Form 10-K, FY2025.
U.S. and worldwide share of flagship products/services
Merck does not state market share percentages in its 10-K.
Reviewed: Form 10-K (FY2025) · Form 10-Q (quarter ended 2026-06-30)
07
Recent strategic focusSite analysis
Recent developments.
Cidara acquisition
Acquired Cidara Therapeutics for about $9.2B; the transaction closed in January 2026.
Source: Form 10-K (FY2025)
Verona Pharma
Acquired Verona Pharma for total consideration of $10.4B, adding Ohtuvayre for COPD.
Source: Form 10-K (FY2025)
Debt issuance
Issued new notes in December 2025 and May 2026.
Source: Form 8-K (2026-05-22) — Item 8.01
Capex ÷ D&A (FY2025)
1.35x
Well above depreciation — expansion-stage investment
formulacapital expenditures ÷ depreciation & amortization
e.g.$4,112M ÷ $3,045M = 1.35x
termsCapital expenditures (capex) · Depreciation & amortization (D&A)
R&D-to-revenue ratio (FY2025)
24.3%
formularesearch & development expense ÷ revenue × 100
e.g.$15,789M ÷ $65,011M × 100 = 24.3%
M&A spend (6-year total)
$11.59B
Latest year: $10.04B
Cash-flow-statement spending on acquisitions, net of cash acquired
Where the money goes, over time
Unit: $M. Capex went from $4.43B in FY2020 to $4.11B in FY2025
- Capex
- R&D
- M&A spend
formulacapital expenditures ÷ depreciation & amortization
termsCapital expenditures (capex) · Depreciation & amortization (D&A)
Source: each period's Form 10-K (SEC EDGAR). Latest: filed 2026-02-24
08
Key figures at a glanceFrom SEC data
FY2020–FY2025, 6 years.
Revenue (FY2025)
$65.01B
As reported in the 10-K
Revenue CAGR (5 years)
+9.4%▲favorable
formula(last-period revenue ÷ first-period revenue) ^ (1 ÷ years) − 1
e.g.($65,011M ÷ $41,518M) ^ (1÷5) − 1 = 9.4%
termsCAGR · ^ (exponent) · Revenue (net sales)
Operating margin (FY2025)
—
formulaoperating income ÷ revenue × 100
ROE (FY2025)
36.9%▲favorable
6-year average: 30.3%
As reported in the 10-K
P/B (FY2025 end)
4.95x
formulafiscal year-end closing price ÷ book value per share
e.g.$105.26 ÷ $21.26 = 4.95x
Period-end (fiscal year-end) value, not today's P/B
EV/EBITDA (FY2025 end)
—
formula(market cap + interest-bearing debt − cash and equivalents) ÷ (operating income + depreciation & amortization)
termsEV/EBITDA · Market capitalization · Interest-bearing debt · EBITDA · Depreciation & amortization (D&A)
Period-end (fiscal year-end) value, not today's multiple
- ▲
Revenue grew +9.4% a year over 5 years (strong growth)
From $41.52B in FY2020 to $65.01B in FY2025. The annualized rate (CAGR) makes it possible to compare growth pace across companies of different sizes.
- ―
Equity ratio is 38.4% (a middling level)
The share of total assets funded by equity rather than debt. 50%+ is often read as low bankruptcy risk, though the right level varies by industry (real estate and leasing run lower, for instance).
- ▲
Free cash flow was positive in 6 of 6 years
Operating cash flow minus capital expenditures: the cash left over after funding the business’s own investment, available for dividends, buybacks, acquisitions, or debt paydown. A negative year can mean heavy investment, or weak core earnings — worth distinguishing.
- ▲
ROE averaged 30.3% over 6 years (latest: 36.9%)
How much profit was generated on shareholders’ equity. Roughly 10%+ is often cited as solid for a U.S. company, though this varies a lot by industry and capital intensity.
09
Business modelSite analysis
Business Model Canvas
The whole company in nine blocks. Left side: how it delivers (partners, activities, resources, costs). Right side: who it serves and how it earns. Every entry comes from the company’s filings shown on this page.
08 · who helps
Key partners
- Verona Pharma
- Cidara Therapeutics
07 · what it does
Key activities
- Pharmaceutical: oncology, vaccines, diabetes, cardiovascular, respiratory, infectious disease
- Animal Health: livestock and companion animal products
06 · what it draws on
Key resources
- About 75,000 employees (30,000 in the U.S.)
- R&D pipeline and patents
- Global manufacturing network
02 · why customers buy
Value propositions
- Prescription medicines (e.g. Keytruda) and vaccines, plus animal health.
04 · how it keeps them
Customer relationships
- Contracts with managed care organizations and governments.
03 · how it reaches them
Channels
- Wholesalers, retailers, hospitals and governments; vaccines to physicians, wholesalers and government entities.
01 · who it serves
Customer segments
- Drug wholesalers and retailers, hospitals, government agencies, managed care
- Veterinarians, distributors and animal producers
09 · where money goes
Cost structure
FY2025, share of revenue ($65.01B)
- Cost of revenue25.2%
- Research & development24.3%
- Selling, general & administrative16.5%
Depreciation & amortization (inside the costs above): $3.05B. Capital spending: $4.11B.
Source: Form 10-K income statement and cash-flow statement (SEC XBRL).
05 · how money comes in
Revenue streams
- Keytruda/Keytruda Qlex $31,680M (2025)
- Gardasil/Gardasil 9 $5,233M
- Animal Health $6,354M
- U.S. $36,510M; International $28,501M
Value propositions, channels and customer relationships: Form 10-K (FY2025)
Discovers, develops, manufactures and sells patented prescription medicines and vaccines (and animal health products) worldwide, funding heavy R&D from high-margin products during their exclusivity periods.
01 what it draws on
Inputs & resources
- About 75,000 employees (30,000 in the U.S.)
- R&D pipeline and patents
- Global manufacturing network
02 what it does
Activities
- Pharmaceutical: oncology, vaccines, diabetes, cardiovascular, respiratory, infectious disease
- Animal Health: livestock and companion animal products
03 who it serves
Customers
- Drug wholesalers and retailers, hospitals, government agencies, managed care
- Veterinarians, distributors and animal producers
04 how money comes in
How it earns
- Keytruda/Keytruda Qlex $31,680M (2025)
- Gardasil/Gardasil 9 $5,233M
- Animal Health $6,354M
- U.S. $36,510M; International $28,501M
How the business makes money
- McKesson, Cencora and Cardinal Health were about 22%, 21% and 13% of accounts receivable at end-2025.
- Keytruda biosimilar competition could begin in December 2028.
- Returned $13.3B to shareholders in 2025 ($8.2B dividends, $5.1B buybacks).
Government & regulation around the business
Non-market factors from the company’s filings: what governments and regulators fund, buy, set, approve or restrict, and which part of the flow above each one touches.
Merck expects Keytruda to face Medicare price setting and secured a tariff delay for U.S. investment.
Regulated prices & reimbursement
Medicare price setting
Lenvima selected in January 2026 (prices from 2028); Merck expects Keytruda to be selected in 2027, effective 2029.
Constrains the businessTouches: How it earnsSource: Form 10-K (FY2025)
Trade & export rules
Section 232 tariff delay
Agreement with the Department of Commerce delays Section 232 tariffs for three years while Merck reshores manufacturing.
Supports the businessTouches: Inputs & resources · ActivitiesSource: Form 10-K (FY2025)
Political engagement
Public policy advocacy
Engages policymakers to show the value of its medicines and vaccines amid cost containment.
Supports the businessTouches: ActivitiesSource: Form 10-K (FY2025)
Revenue by segment (FY2025)
Unit: $M — bar length = revenue, (%) = share of total company revenue
Pharmaceutical
58,142 (90%)Animal Health
6,354 (10%)
Source: Form 10-K (FY2025) Segment sales; total $65,011M incl. other revenues ($515M).
10
Where it earnsSite analysis
Many U.S.-listed companies earn most of their revenue outside the U.S. — this breaks down revenue by country/region so it's clear where the business actually makes its money.
Largest market (FY2025)
United States — 56% of revenue
Revenue by country / region (FY2025)
Unit: $M — bar length = revenue, (%) = share of total company revenue
United States
36,510 (56%)International
28,501 (44%)
Source: Form 10-K (FY2025) Sales by region.
11
Contract structureSite analysisShow
Short-term or spot sales carry different earnings quality than long-term or auto-renewing contracts — this shows how the company actually contracts with its customers.
12
Alliances & capital tiesSite analysisShow
Equity stakes, joint ventures, and strategic partnerships disclosed across the 10-K, 8-Ks, and proxy statement.
Pending or recent acquisition
Verona Pharma
Acquired for $10.4B in 2025, adding Ohtuvayre (ensifentrine) for COPD.
Source: Form 10-K (FY2025)
Pending or recent acquisition
Cidara Therapeutics
Agreed to acquire for about $9.2B; closed January 2026, adding a long-acting influenza antiviral.
Source: Form 10-K (FY2025)
13
Customers & suppliersSite analysis
Who the company sells to and buys from. Companies rarely name either, so named counterparties come only from the company's own filings and press releases; otherwise this lists the concentration figures the 10-K discloses.
Customers
Wholesalers, retailers, hospitals, governments and managed care organizations.
Named by the company
- McKesson — About 22% of accounts receivable at December 31, 2025.Form 10-K (FY2025)
- Cencora — About 21% of accounts receivable.Form 10-K (FY2025)
- Cardinal Health — About 13% of accounts receivable.Form 10-K (FY2025)
Suppliers
Raw material suppliers and contract manufacturers.
Named by the company
No material supplier is named.
14
Competitors & peersSite analysis
Competitors the 10-K names, and the peer group the company itself chose in its proxy statement. Nothing here is this site's own pick.
Merck competes with other research-based pharmaceutical and biotech companies and with generic and biosimilar makers.
Competitors named in the 10-K
The 10-K does not list competitors by name.
Peer group the company chose
Primary peer group, from the proxy statement. Peers are companies the board considers comparable — for example when setting executive pay — not necessarily direct competitors.
Primary compensation peer group from the 2026 proxy statement.
- AbbViesite ↗
- Amgensite ↗
- AstraZenecasite ↗
- Bristol-Myers Squibbsite ↗
- Lilly (Eli)site ↗
- Gilead Sciencessite ↗
- GSKsite ↗
- Johnson & Johnsonsite ↗
- Novartissite ↗
- Pfizersite ↗
- Roche (Ventana Medical Systems)site ↗
- Sanofisite ↗
Company names link to this site’s analysis where one exists; “site ↗” opens the company’s own website.
15
Six years of financialsFrom SEC data
Each chart's axis holds a single unit (never mixing dollars, %, and $/share). The table's per-period header links to the filing the numbers came from.
Revenue over time
Unit: $M
Source: each period's Form 10-K (SEC EDGAR). Latest: filed 2026-02-24
Profit over time (operating → net)
Unit: $M
- Pretax income
- Net income
Source: each period's Form 10-K (SEC EDGAR). Latest: filed 2026-02-24
Margins over time
Unit: %
- Operating margin
- Net margin
formulaoperating income ÷ revenue × 100
formulanet income attributable to the company ÷ revenue × 100
Cash flow over time
Unit: $M (below zero = cash went out)
- Operating CF
- Investing CF
- Free CF
formulacash flow from operations − capital expenditures
termsFree cash flow (FCF) · Cash flow from operations (operating CF) · Capital expenditures (capex)
Source: each period's Form 10-K (SEC EDGAR). Latest: filed 2026-02-24
Financial stability & capital efficiency
Unit: %
- Equity ratio
- ROE
formulatotal equity ÷ total assets × 100 (as reported in the 10-K)
termsStockholders’ equity · Total assets
formulanet income ÷ average equity (beginning + ending, ÷2) × 100 (as reported in the 10-K)
termsNet income (attributable to the company) · Stockholders’ equity
Earnings per share (EPS) and dividend per share
Unit: $
- EPS
- Dividend per share
Source: each period's Form 10-K (SEC EDGAR). Latest: filed 2026-02-24
| Line item | FY202010-K on EDGAR ↗ | FY202110-K on EDGAR ↗ | FY202210-K on EDGAR ↗ | FY202310-K on EDGAR ↗ | FY202410-K on EDGAR ↗ | FY202510-K on EDGAR ↗ |
|---|---|---|---|---|---|---|
| Income statement ($M) | ||||||
| Revenue | 41,518 | 48,704 | 59,283 | 60,115 | 64,168 | 65,011 |
| Pretax income | 5,863 | 13,879 | 16,444 | 1,889 | 19,936 | 21,067 |
| Net income (attributable) | 7,067 | 13,049 | 14,519 | 365 | 17,117 | 18,254 |
| Revenue growthcalc(this year’s revenue − last year’s revenue) ÷ last year’s revenue × 100 | — | 17.3% | 21.7% | 1.4% | 6.7% | 1.3% |
| Net margincalcnet income attributable to the company ÷ revenue × 100 | 17.0% | 26.8% | 24.5% | 0.6% | 26.7% | 28.1% |
| Balance sheet ($M) | ||||||
| Total assets | 91,588 | 105,694 | 109,160 | 106,675 | 117,106 | 136,866 |
| Total equity | 25,404 | 38,257 | 46,058 | 37,635 | 46,372 | 52,662 |
| Interest-bearing debtSum of short- and long-term borrowings, notes/bonds payable | 31,800 | 33,100 | 30,700 | 35,100 | 37,100 | 49,300 |
| Equity ratio | 27.6% | 36.1% | 42.1% | 35.2% | 39.5% | 38.4% |
| ROE | 27.9% | 41.1% | 34.5% | 0.9% | 40.8% | 36.9% |
| Cash flow ($M) | ||||||
| Operating CF | 10,253 | 13,122 | 19,095 | 13,006 | 21,468 | 16,472 |
| Investing CF | -9,443 | -16,421 | -4,960 | -14,083 | -7,734 | -13,741 |
| Financing CF | -2,832 | 3,097 | -9,119 | -4,810 | -7,032 | -1,922 |
| Free cash flowcalccash flow from operations − capital expenditures | 5,824 | 8,674 | 14,707 | 9,143 | 18,096 | 12,360 |
| Cash and equivalents | 8,050 | 8,096 | 12,694 | 6,841 | 13,242 | 14,565 |
| Per share & other | ||||||
| EPS ($) | 2.78 | 5.14 | 5.71 | 0.14 | 6.74 | 7.28 |
| BVPS ($) | 10.01 | 15.11 | 18.12 | 14.84 | 18.32 | 21.26 |
| Dividend per share ($) | 2.48 | 2.64 | 2.80 | 2.96 | 3.12 | 3.28 |
| Payout ratiocalcdividend per share ÷ diluted EPS × 100 | 89.2% | 51.4% | 49.0% | 2114.3% | 46.3% | 45.1% |
| P/E (x) | 28.1 | 14.9 | 19.4 | 778.7 | 14.8 | 14.5 |
| P/B (x)calcfiscal year-end closing price ÷ book value per share | 7.80 | 5.07 | 6.12 | 7.34 | 5.43 | 4.95 |
P/B and EV/EBITDA use each period’s period-end (fiscal year-end) figures, not the current share price. Figures without a "calc" tag are as reported in the Form 10-K (the consolidated financial statements and, for older years, earlier 10-Ks), pulled automatically from SEC EDGAR. Where a later filing restated a prior period, the restated figure is used.
Last 8 quarters
Three-month figures from 10-Q filings. Change is versus the same quarter a year earlier. Newest quarter on top.
| Quarter ended | Revenue | Net income | Diluted EPS |
|---|---|---|---|
| 2026-09-30 | $18.09B+4.7% | $5.07B-12.4% | $2.04 |
| 2026-06-30 | $16.61B+5.1% | −$1.34B-130.2% | $-0.54 |
| 2026-03-31 | $16.29B+4.9% | −$4.24B-183.5% | $-1.72 |
| 2025-12-31 † | $16.4B+5.0% | $2.96B-20.8% | — |
| 2025-09-30 | $17.28B | $5.79B | $2.32 |
| 2025-06-30 | $15.81B | $4.43B | $1.76 |
| 2025-03-31 | $15.53B | $5.08B | $2.01 |
| 2024-12-31 † | $15.62B | $3.74B | — |
† Fourth quarter = the 10-K’s annual figure minus the first three quarters; quarterly EPS isn’t derived this way because share counts change during the year.
16
Is ROIC above WACC?From SEC data
ROIC (the return on money invested in the business) above WACC (the cost of raising that money) means the company is creating value. WACC is an estimate, so its assumptions can be adjusted below.
Not enough data (operating income, equity, etc.) to compute ROIC/WACC.
17
What the price implies (DCF)From SEC data
A company's value can be written as its free cash flow divided by (cost of capital − perpetual growth). Working that backwards from the market's valuation shows how much growth the share price assumed — compared here with the company's actual past growth.
Growth the price implies (price on 2026-11-04)
3.9%
Perpetual FCF growth: g = r − FCF ÷ EV = 7.0% − 3.1%
Past FCF growth (FY2020–FY2025)
+16.2%
Compound annual rate, 5 years
Past revenue growth (FY2020–FY2025)
+9.4%
Compound annual rate, 5 years
Inputs (FY2025): free cash flow $12.36B (operating CF − capex); enterprise value $397.66B = market cap $362.93B (latest close, 2026-11-04) + debt $49.3B − cash and short-term investments $14.57B; r = WACC of 7.0% using this page’s default assumptions (β 0.53, risk-free 5.0%, market premium 5.5%).
Three WACC scenarios
The same calculation under cautious, base and optimistic cost-of-capital assumptions (risk-free rate fixed at the 10-year Treasury yield). Pick one to load it into the sliders below.
Try your own assumptions
V = FCF ÷ (r − g). It starts at the implied growth rate, where the theoretical value equals today’s enterprise value.
Theoretical enterprise value
$398.71B
FCF $12.36B ÷ (7.0% − 3.9%)
Theoretical ÷ actual enterprise value
1.00x
Above 1x: these assumptions value the business above the market did
How sensitive the answer is
Theoretical ÷ actual enterprise value for each combination of r and g.
| g \ r | 5.0% | 6.0% | 7.0% | 8.0% | 9.0% |
|---|---|---|---|---|---|
| 0% | 0.62x | 0.52x | 0.44x | 0.39x | 0.35x |
| 2% | 1.04x | 0.78x | 0.62x | 0.52x | 0.44x |
| 4% | 3.11x | 1.55x | 1.04x | 0.78x | 0.62x |
| 6% | — | — | 3.11x | 1.55x | 1.04x |
| 8% | — | — | — | — | 3.11x |
A simplified model for seeing what the market price assumes, not a forecast or a target price. It treats free cash flow as growing at one constant rate forever; the result swings widely with small changes in r and g, and is undefined when g reaches r. Free cash flow here is operating cash flow minus capex, which is after interest — a full DCF of enterprise value would use cash flow before interest. Market cap uses the latest close (2026-11-04) × shares at fiscal year-end; free cash flow and WACC inputs are from the latest fiscal year.
18
Earnings qualityFrom SEC dataShow
The same reported profit can mean different things depending on whether it's backed by cash, driven by the core business, or the result of a one-off item. Four checks below.
- ✓
Operating CF ÷ net income: averages 6.93x
Profit is backed by cash coming in.
- ✓
Accrual ratio (latest): 1.4%
A small share of profit rests on accounting estimates.
- ✓
Days sales outstanding: 60 → 62 days
No major slowdown in collecting on sales.
Operating CF vs. net income
Unit: $M — operating CF above net income means profit is backed by cash
- Operating CF
- Net income
formulacash flow from operations ÷ net income attributable to the company
termsCash flow from operations (operating CF) · Net income (attributable to the company)
formula(net income − operating CF) ÷ average total assets × 100
termsNet income (attributable to the company) · Cash flow from operations (operating CF) · Total assets
Source: each period's Form 10-K (SEC EDGAR). Latest: filed 2026-02-24
Receivables & inventory days
Unit: days — days grow when receivables or inventory build up faster than sales
- Days sales outstanding
- Days inventory outstanding
formulaaverage receivables (opening + closing ÷ 2) ÷ revenue × 365
formulaaverage inventory (opening + closing ÷ 2) ÷ cost of revenue × 365
termsInventory · Cost of revenue (COGS)
Worked examples (latest period)
formulacash flow from operations ÷ net income attributable to the company
e.g.$16,472M ÷ $18,254M = 0.90x
termsCash flow from operations (operating CF) · Net income (attributable to the company)
formulaoperating income ÷ income before income taxes × 100
termsOperating income · Income before income taxes (pretax income)
formulaaverage receivables (opening + closing ÷ 2) ÷ revenue × 365
e.g.($10,278M + $11,775M) ÷ 2 ÷ $65,011M × 365 = 62 days
formulaaverage inventory (opening + closing ÷ 2) ÷ cost of revenue × 365
e.g.($6,109M + $6,658M) ÷ 2 ÷ $16,382M × 365 = 142 days
termsInventory · Cost of revenue (COGS)
19
Who holds the sharesFrom SEC dataShow
How much of the stock large institutional investors report owning on SEC Form 13F, how much the directors and executive officers hold (and how much of the vote they control), and roughly how much is left for individual investors. Shown next to beta so the holder mix can be read alongside how much the stock swings.
Institutions, insiders and everyone else, 13F holdings as of 2026-06-30
“Everyone else” is what remains after shares reported on Form 13F and shares held by directors and executive officers: mostly individual investors, plus non-insider families or foundations and smaller or foreign institutions. The figures have different dates and 13F reports count some shares twice — read it as an approximate split.
- Held by 13F filers
- 80.3%
- Directors & officers (shares)
- <1%
- Everyone else (est.)
- 19.7%
- Directors & officers (voting power)
- <1%
- Institutional-ownership rank
- 300 of 416
- Beta (adjusted)
- 0.53
individuals and other non-13F holders
no separate voting figure; shown as shares
1 = most institutional; 72% of covered companies have more
above 1 = swings more than the market
- 1,981.8M shares reported by 3,826 13F filers ÷ 2,467.2M shares outstanding on 2026-07-31. Option positions are excluded.
- Directors and executive officers as a group, from the proxy statement’s beneficial-ownership table (percentage computed from the group’s share count ÷ shares outstanding); includes shares they can acquire within 60 days.
- A large “everyone else” share can still reflect a family, trust or foundation stake held outside the board; check the proxy statement’s 5% holders.
Sources: SEC Form 13F data set (holdings as of 2026-06-30) · Form DEF 14A filed 2026-04-08 (beneficial ownership table) · Form 10-Q cover page (shares outstanding as of 2026-07-31)
20
Strengths & weaknessesSite analysis
Strengths
1. Blockbuster oncology
Keytruda sales grew from $25,011M (2023) to $31,680M (2025).
Evidence: Form 10-K (FY2025)
2. New launches
Winrevair and Capvaxive contributed to 2025 growth.
Evidence: Proxy statement (2026)
3. Animal Health growth
Animal Health sales rose to $6,354M in 2025.
Evidence: Form 10-K (FY2025)
Weaknesses
1. Keytruda dependence
Keytruda was about 49% of 2025 sales and faces biosimilars from 2028–2029.
Evidence: Form 10-K (FY2025)
2. Gardasil slump
Gardasil sales fell from $8,886M (2023) to $5,233M (2025) on lower sales in China.
Evidence: Form 10-K (FY2025)
3. Rising debt
Interest-bearing debt rose to $49.3B at end-2025 after the Verona acquisition.
Evidence: Form 10-K (FY2025)
4. Keytruda price-setting risk
Expects Keytruda to be selected for Medicare price setting in 2027, effective 2029.
Evidence: Form 10-K (FY2025)
21
What draws investors to itSite analysis
Why the stock can look attractive to investors — each point paired with what has to hold for it to stay true, and the opposing view. This is this site's analysis, not a recommendation to buy or sell.
P/E (FY2025)
14.5x
Price at fiscal year-end ÷ diluted EPS
Dividend yield (FY2025)
3.12%
Dividends per share ÷ fiscal year-end price
Payout ratio (FY2025)
45%
Dividends per share ÷ diluted EPS
FCF yield (FY2025)
4.7%
(Operating CF − capex) ÷ market cap
1. Pipeline replenishment
Acquisitions and launches aim to offset Keytruda LOE.
- What has to hold
- New products scale up.
- The other side
- Keytruda cliff is large.
Evidence: Form 10-K (FY2025)
2. Shareholder returns
Dividend raised to $0.85 quarterly; $10B buyback authorization.
- What has to hold
- Cash flow stays strong.
- The other side
- Higher debt.
Evidence: Form 10-K (FY2025)
2023 net income ($365M) was depressed by large charges for acquired in-process R&D. 2020 figures exclude Organon, spun off in June 2021.
22
ResilienceSite analysisShow
How well the company could absorb a bad year: its financial buffer, how its revenue and profit held up in the worst year on record, and what the 10-K says about the business's exposure to shocks. Figures and filing statements only — no overall rating.
1. Financial buffer (FY2025)
Cash & short-term investments ÷ debt due within a year
5.6x
$14.57B vs. $2.59B
Interest coverage (operating income ÷ interest expense)
Not disclosed
The income statement has no operating income line.
Free cash flow ÷ dividends paid
1.5x
$12.36B vs. $8.18B (FCF = operating CF − capex)
2. Worst year in the record, and the recovery
| Figure | Worst year-over-year change | Back to the prior level? |
|---|---|---|
| Revenue | No decline in the record | — |
Covers only the 6 fiscal years on record (FY2020–FY2025), which may not include a full recession — the worst year here isn’t necessarily how the company would fare in a severe downturn.
3. Business resilience (from the 10-K)
Profitable every year
Net income was positive every year 2020–2025, including 2023 ($365M) despite large R&D charges.
Source: Form 10-K (FY2025)
23
Legal & regulatory mattersSite analysisShow
Lawsuits, government investigations, enforcement actions and settlements the company discloses — where each stands, what is at stake, and what comes next. From the 10-K's Legal Proceedings and contingencies note, the latest 10-Q, and 8-Ks.
Merck faces product liability, patent and antitrust litigation typical of large drugmakers.
2 open matters (2 flagged as major) · 1 settled or closed
Gardasil MDL
On appealProduct liabilityMajorGardasil plaintiffs
Gardasil product liability cases are coordinated in the Western District of North Carolina; the court granted Merck summary judgment in 16 bellwether cases in March 2025, and plaintiffs appealed to the Fourth Circuit.
Source: Form 10-K (FY2025) — Note on Contingencies and Environmental Liabilities
Keytruda patent challenges
PendingPatent / IPMajorBiosimilar makers
Merck expects the Keytruda composition-of-matter patents expiring in 2029 to be litigated, with biosimilar competition possibly from December 2028.
Source: Form 10-K (FY2025)
Zetia antitrust litigation
SettledAntitrustPurchasers
Merck recorded $573M of Zetia antitrust settlements in 2023.
Source: Form 10-K (FY2025)
Company statement: Other proceedings are described as ordinary-course and not expected to be material.
Based on Form 10-K (FY2025) — Note on Contingencies and Environmental Liabilities, reviewed 2026-10-30. Routine ordinary-course claims are not listed. “Major” is this site’s judgment of which matters could materially affect results.
24
Risks (including geopolitical)Site analysis
Starting from the 10-K's Risk Factors section, organized by category — geopolitical, currency, raw materials, regulatory, disaster, and more — with impact and likelihood assessed by this site.
Risk map
Vertical = impact on results, horizontal = likelihood. Upper right = most severe. Numbers match the list below (placement is this site’s own assessment).
Likelihood →
"Company disclosure" vs. "this site’s assessment"
The description and mitigation for each risk are this site’s summary of the 10-K’s "Risk Factors" section. Impact and likelihood are this site’s own assessment, not the company’s — where the company discloses its own likelihood assessment, that is noted in the summary.
Impact is judged from how large the affected business is relative to total revenue/profit, and from the risk’s track record of moving results in the past. Likelihood is judged from the filing’s wording and the current business environment (already occurring, or recurring). See the rating criteria.
- 1Competition & technology shift
Loss of exclusivity
- Company disclosure (summarized from the 10-K)
- Keytruda biosimilar competition expected between 2028 and 2029.
- Company’s stated mitigation
- Not stated in the filings.
- This site’s assessment
- Impact High / Likelihood High
- 2Law & regulation
U.S. drug pricing
- Company disclosure (summarized from the 10-K)
- The Inflation Reduction Act and 340B program pressure U.S. prices.
- Company’s stated mitigation
- Not stated in the filings.
- This site’s assessment
- Impact High / Likelihood High
- 3Geopolitics & supply chain
China
- Company disclosure (summarized from the 10-K)
- Gardasil sales in China declined significantly and are not expected to increase materially in 2026.
- Company’s stated mitigation
- Not stated in the filings.
- This site’s assessment
- Impact Med / Likelihood High
- 4Law & regulation
Product liability
- Company disclosure (summarized from the 10-K)
- Gardasil MDL and other product liability litigation.
- Company’s stated mitigation
- Not stated in the filings.
- This site’s assessment
- Impact Med / Likelihood Med
- 5M&A & integration
Acquisitions
- Company disclosure (summarized from the 10-K)
- Integrating Verona and Cidara and realizing pipeline value.
- Company’s stated mitigation
- Not stated in the filings.
- This site’s assessment
- Impact Med / Likelihood Med
25
What changed in the risk factorsFrom SEC data
Paragraphs in the latest 10-K's Risk Factors that have little overlap with the year before, and paragraphs that were dropped.
New or substantially reworded (3)
Also, as noted above, in December 2025, the Company entered into the MFN Agreement with the U.S. Read more
government pursuant to which the Company will provide key products through a direct-to-patient program at affordable prices for eligible patients in the U.S. This currently includes Januvia , Janumet , and Janumet XR , and will be expanded in the future to include enlicitide decanoate pending FDA approval. The Company also agreed to offer its existing medicines at discounted prices to Medicaid, excluding certain products. In addition, the Company has agreed that products launched during the term of the MFN Agreement (with certain exceptions) will be subject to “most-favored-nation” pricing in reference to prices for such products in the MFN Countries.
In addition, it is possible that as a consequence of the MFN Agreement, certain of the Company’s products may not be launched in the MFN Countries or their launch may be delayed and as a result, the MFN Countries may take actions that adversely impact the Company.
The Company’s business in China experienced significantly lower sales of Gardasil/Gardasil 9 in 2025. Read more
Due to above normal inventory levels at the Company’s commercialization partner in China, the Company made a decision to pause shipments to China beginning in February 2025 and has not resumed shipments to date. The Company will not resume shipments until inventory levels return to normal levels and it cannot predict when shipments to China will resume nor the levels of sales that the Company will achieve and as a result, the Company expects that sales of Gardasil/Gardasil 9 in China will not materially increase in 2026. In June 2025, a nine-valent HPV vaccine produced by a local manufacturer received regulatory approval in China for use in females 9-45 years of age.
No longer in the text (3)
• The Company’s business in China has grown in the past few years, and the importance of China to the Company’s overall pharmaceutical and vaccines business has increased accordingly. Read more
In 2024, the Company experienced lower sales of Gardasil/Gardasil 9 in China and expects that sales of Gardasil/Gardasil 9 in China will decline significantly in 2025.
The U.S. government has announced plans to significantly increase tariffs on foreign imports into the U.S., particularly from Canada and Mexico and has already increased tariffs on imports from China. Read more
It is too early for the
The Company’s business in China has grown in the past few years, and the importance of China to the Company’s overall pharmaceutical and vaccines business has increased accordingly. Read more
In 2024, the Company experienced lower sales of Gardasil/Gardasil 9 in China and expects that sales of Gardasil/Gardasil 9 in China will decline significantly in 2025.
Matched automatically, quoted as filed, and may include rewording of an existing risk. Compares Item 1A of the 10-K filed Feb 24, 2026 ↗ with the 10-K filed Feb 25, 2025 ↗.
26
What to watch going forwardSite analysis
- Keytruda Qlex (subcutaneous) adoption ahead of the Keytruda patent expiry.
- Winrevair, Capvaxive and Ohtuvayre growth.
- Gardasil in China.
27
Source documentsShow
This page's financial figures come from the Form 10-Ks listed below. Check the original filings for full detail.
Other sources referenced in the analysis
Last updated
Analysis last edited: October 30, 2026 · Financial data fetched: October 30, 2026 12:51 (SEC EDGAR) · Source 10-K filed: February 24, 2026
Built on10-K FY2025 · filed 2026-02-24Proxy statement (2026)
Next update expectedAfter FY2026’s 10-K is filed (roughly 60–90 days after fiscal year end (sooner for larger filers)), financials and analysis will be refreshed.
This page is this site’s own analysis based on public information, and does not represent Merck & Co.’s views. It is not a recommendation to buy or sell any security, and this site does not guarantee the accuracy of any figure or statement here. Always verify against the original source documents before making an investment decision.