Fundamental Facts for Bristol-Myers Squibb Company Investors

We've been asking ourselves recently if the market has placed a fair valuation on Bristol-Myers Squibb Company. Let's dive into some of the fundamental values of this large-cap Health Care company to determine if there might be an opportunity here for value-minded investors.

A Very Low P/E Ratio but Trades Above Its Graham Number:

Bristol-Myers Squibb Company discovers, develops, licenses, manufactures, markets, distributes, and sells biopharmaceutical products worldwide. The company belongs to the Health Care sector, which has an average price to earnings (P/E) ratio of 24.45 and an average price to book (P/B) ratio of 4.16. In contrast, Bristol-Myers Squibb Company has a trailing 12 month P/E ratio of 15.6 and a P/B ratio of 3.82.

Bristol-Myers Squibb Company's PEG ratio is 5.23, which shows that the stock is probably overvalued in terms of its estimated growth. For reference, a PEG ratio near or below 1 is a potential signal that a company is undervalued.

Wider Gross Margins Than the Industry Average of 60.94%:

2018-02-13 2019-02-25 2020-02-24 2021-02-10 2022-02-09 2023-02-14
Revenue (MM) $20,776 $22,561 $26,145 $42,518 $46,385 $46,159
Gross Margins 71.0% 71.0% 69.0% 72.0% 79.0% 78.0%
Operating Margins 17% 23% 23% 8% 18% 20%
Net Margins 5.0% 22.0% 13.0% -21.0% 15.0% 14.0%
Net Income (MM) $1,007 $4,920 $3,439 -$9,015 $6,994 $6,327
Earnings Per Share $0.61 $3.01 $2.01 -$3.99 $3.12 $2.82
EPS Growth n/a 393.44% -33.22% -298.51% 178.2% -9.62%
Diluted Shares (MM) 1,652 1,637 1,712 2,258 2,243 2,245
Free Cash Flow (MM) $6,330 $8,017 $9,046 $14,805 $17,180 $14,184
Capital Expenditures (MM) -$1,055 -$951 -$836 -$753 -$973 -$1,118
Net Current Assets (MM) -$6,850 -$3,699 -$48,892 -$50,407 -$40,046 -$38,429
Long Term Debt (MM) $6,975 $5,646 $43,387 $48,336 $39,605 $35,056
Net Debt / EBITDA 0.27 -0.27 4.09 2.54 1.44 1.55

Bristol-Myers Squibb Company has exceptional EPS growth and wider gross margins than its peer group. Additionally, the company's financial statements display decent operating margins with a stable trend and healthy leverage. Furthermore, Bristol-Myers Squibb Company has weak revenue growth and a flat capital expenditure trend, irregular cash flows, and just enough current assets to cover current liabilities.

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.