The Most Important Facts About Organon & Co.

Organon & Co. logged a -0.5% change during today's morning session, and is now trading at a price of $19.73 per share.

Organon & Co. returned losses of -31.0% last year, with its stock price reaching a high of $32.43 and a low of $18.87. Over the same period, the stock underperformed the S&P 500 index by -43.0%. As of April 2023, the company's 50-day average price was $21.59. Organon & Co. develops and delivers health solutions through a portfolio of prescription therapies and medical devices within women's health in the United States and internationally. Based in Jersey City, NJ, the mid-cap Health Care company has 10,000 full time employees. Organon & Co. has offered a 5.6% dividend yield over the last 12 months.

Exceptional Profitability Overshadowed by Excessive Leverage:

2022-03-21 2023-02-27
Revenue (MM) $6,304 $6,174
Gross Margins 62.0% 63.0%
Operating Margins 30% 28%
Net Margins 21.0% 15.0%
Net Income (MM) $1,351 $917
Net Interest Expense (MM) -$258 -$422
Depreciation & Amort. (MM) -$195 -$212
Earnings Per Share $5.31 $3.59
EPS Growth n/a -32.39%
Diluted Shares (MM) 254 255
Free Cash Flow (MM) $2,345 $1,047
Capital Expenditures (MM) -$185 -$189
Net Current Assets (MM) -$8,429 -$7,916
Long Term Debt (MM) $9,125 $8,905
Net Debt / EBITDA 3.98 4.28

Organon & Co. has slimmer gross margins than its peers, declining EPS growth, and a highly leveraged balance sheet. On the other hand, the company has strong margins with a stable trend working in its favor. Furthermore, Organon & Co. has weak revenue growth and a flat capital expenditure trend, irregular cash flows, and a decent current ratio.

Organon & Co. Is Overvalued:

Organon & Co. has a trailing twelve month P/E ratio of 7.7, compared to an average of 24.45 for the Health Care sector. Based on its EPS guidance of $4.59, the company has a forward P/E ratio of 4.7. The company doesn't issue forward earnings guidance, and the compound average growth rate of its last 2 years of reported EPS is -27.5%. On this basis, the company's PEG ratio is -0.28, which indicates that its shares are overpriced.

Organon & Co. Has an Average Rating of Hold:

The 6 analysts following Organon & Co. have set target prices ranging from $23.0 to $43.0 per share, for an average of $31.0 with a hold rating. As of April 2023, the company is trading -30.4% away from its average target price, indicating that there is an analyst consensus of strong upside potential.

Organon & Co. has an average amount of shares sold short because 3.1% of the company's shares are sold short. Institutions own 79.8% of the company's shares, and the insider ownership rate stands at 0.1%, suggesting a small amount of insider investors. The largest shareholder is Vanguard Group Inc, whose 12% stake in the company is worth $624,964,190.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.