Does Teva Pharmaceutical Industries Have a Profitable Business Model?

Does large-cap None company Teva Pharmaceutical Industries have a sustainably profitable business model? By studying its gross margins and comparing them to its operating margins, we can gain insight into quality of its business. With gross margins at 45.8%, you might be telling yourself the Teva Pharmaceutical Industries is profitable -- but there is more to the story.

Gross margins take into account only the cost of revenue, meaning the expenses directly related to each sale. So it's important to also look at operating margins, which take into account overhead costs. One way to look at it is that gross profit gives insight into Teva Pharmaceutical Industries's market and the viability of its business model. Operating margins, on the other hand, show you how efficiently the company is implementing this business model.

Date Reported Revenue ($ k) Cost of Revenue ($ k) Gross Margins (%)
2023 15,272,000 8,273,000 46
2022 14,925,000 7,952,000 47
2021 15,878,000 8,284,000 48
2020 16,659,000 8,933,000 46
2019 16,887,000 9,351,000 45
2018 18,271,000 11,237,000 13

Teva Pharmaceutical Industries's gross margins have a coefficient of variability of None%, with a low percentage rate being more desirable as it indicates stability. Revenues have a delta of -2.9% while cost of revenue is shrinking at a rate of -5.0%, which allows for the company's gross margins to grow at an average 23.4% per year.

Date Reported Total Revenue ($ k) Operating Expenses ($ k) Operating Margins (%)
2023 15,272,000 1,159,000 -7
2022 14,925,000 1,180,000 -14
2021 15,878,000 1,099,000 11
2020 16,659,000 1,173,000 -21
2019 16,887,000 1,192,000 -3
2018 18,271,000 1,451,000 -9

The table above tells us that, on average, Teva Pharmaceutical Industries has not been profitable over the last four years, which should be a warning sign to prospective investors. One bright spot, however, is that the company's operating margins are growing at an average yearly rate of 3.0%.

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.