Viatris shares fell by -1.1% during the day's morning session, and are now trading at a price of $8.49. Is it time to buy the dip? To better answer that question, it's essential to check if the market is valuing the company's shares fairly in terms of its earnings and equity levels.
Viatris Is Fairly Priced at Current Levels:
Viatris Inc., together with its subsidiaries, operates as a healthcare company in North America, Europe, China, Taiwan, Hong Kong, Japan, Australia, New Zealand, rest of Asia, Africa, Latin America, and the Middle East. The company belongs to the Health Care sector, which has an average price to earnings (P/E) ratio of 22.94 and an average price to book (P/B) ratio of 3.19. In contrast, Viatris has a trailing 12 month P/E ratio of -2.7 and a P/B ratio of 0.64.
Viatris has moved -17.6% over the last year compared to 11.5% for the S&P 500 — a difference of -29.1%. Viatris has a 52 week high of $13.55 and a 52 week low of $6.85.
The Business Is Unprofitable and Its Balance Sheet Is Highly Leveraged:
| 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $11,370 | $11,946 | $17,886 | $16,263 | $15,427 | $14,739 |
| Gross Margins | 34% | 32% | 31% | 40% | 42% | 38% |
| Net Margins | n/a | -6.0% | -7.0% | 13.0% | 0.0% | -4.0% |
| Net Income (M) | n/a | -$670 | -$1,269 | $2,079 | $55 | -$634 |
| Net Interest Expense (M) | -$44 | $498 | $636 | $592 | $573 | $550 |
| Depreciation & Amort. (M) | $256 | $2,216 | $4,506 | $3,028 | $2,740 | $357 |
| Diluted Shares (M) | 516 | 601 | 1,209 | 1,217 | 1,208 | 1,200 |
| Earnings Per Share | $0.03 | -$1.11 | -$1.05 | $1.71 | $0.05 | -$0.53 |
| EPS Growth | n/a | -3800.0% | 5.41% | 262.86% | -97.08% | -1160.0% |
| Free Cash Flow (M) | $1,590 | $428 | $2,560 | $2,593 | $2,523 | $1,977 |
| CAPEX (M) | $213 | $243 | $457 | $406 | $377 | $326 |
| Total Debt (M) | $1,458 | $13,791 | $21,577 | $19,266 | $18,123 | $14,040 |
| Net Debt / EBITDA | 2.39 | 6.46 | 4.67 | 3.88 | 4.89 | 36.24 |
| Current Ratio | 1.21 | 1.22 | 1.1 | 1.58 | 1.67 | 1.65 |
Viatris has growing revenues and increasing reinvestment in the business, generally positive cash flows, and a decent current ratio of 1.65. However, Viatris has slimmer gross margins than its peers, declining EPS growth, and a highly leveraged balance sheet.
