Teva Pharmaceutical Industries (TEVA) Stock Analysis – Key Insights

It's been a great afternoon session for Teva Pharmaceutical Industries investors, who saw their shares rise 3.1% to a price of $18.0 per share. At these higher prices, is the company still fairly valued? If you are thinking about investing, make sure to check the company's fundamentals before making a decision.

Teva Pharmaceutical Industries's Valuation Is in Line With Its Sector Averages:

Teva Pharmaceutical Industries Limited develops, manufactures, markets, and distributes generic medicines, specialty medicines, and biopharmaceutical products in North America, Europe, Israel, and internationally. The company belongs to the Health Care sector, which has an average price to earnings (P/E) ratio of 26.07 and an average price to book (P/B) ratio of 3.53. In contrast, Teva Pharmaceutical Industries has a trailing 12 month P/E ratio of -46.2 and a P/B ratio of 3.21.

Teva Pharmaceutical Industries's PEG ratio is 4.47, 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.

Generally Positive Cash Flows but Slimmer Gross Margins than the Industry Average of 57.86%:

2018 2019 2020 2021 2022 2023
Revenue (M) $18,271 $16,887 $16,659 $15,878 $14,925 $15,846
Gross Margins 11% 45% 46% 48% 47% 48%
Net Margins -16% -6% -24% 3% -16% -4%
Net Income (M) -$2,886 -$999 -$3,990 $417 -$2,446 -$559
Net Interest Expense (M) -$959 -$822 -$834 -$1,058 -$966 -$1,057
Depreciation & Amort. (M) $1,842 $1,722 $1,557 $1,330 $1,308 $1,153
Diluted Shares (M) 1,021 1,091 1,095 1,107 1,110 1,119
Earnings Per Share -$2.85 -$0.91 -$3.64 $0.38 -$2.2 -$0.5
EPS Growth n/a 68.07% -300.0% 110.44% -678.95% 77.27%
Avg. Price $20.92 $11.5 $10.43 $10.09 $8.49 $17.94
P/E Ratio -7.34 -12.64 -2.87 26.55 -3.86 -35.88
Free Cash Flow (M) $1,795 $223 $638 $236 $1,042 $1,368
CAPEX (M) $651 $525 $578 $562 $548 n/a
EV / EBITDA 113.29 10.11 -6.18 3.41 -9.83 11.7
Total Debt (M) $2,216 $2,345 $3,188 $1,426 $2,109 $1,672
Net Debt / EBITDA 2.12 0.29 -0.5 -0.24 0.78 -0.98
Current Ratio 0.96 0.98 0.99 1.14 1.05 1.02

Teva Pharmaceutical Industries has generally positive cash flows, a strong EPS growth trend, and healthy leverage levels. However, the firm has slimmer gross margins than its peers. Finally, we note that Teva Pharmaceutical Industries has just enough current assets to cover current liabilities, as shown by its current ratio of 1.02.

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.

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