Common Stock Valuation Ratios (Price Multiples)
Valuation ratios measure the quantity of an asset or flaw (e.g., earnings) associated with ownership of a specified claim (e.g., a share of ownership of the enterprise).
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Current Valuation Ratios
Merck & Co. Inc., current price multiples
| Merck & Co. Inc. | AbbVie Inc. | Amgen Inc. | Bristol-Myers Squibb Co. | Danaher Corp. | Eli Lilly & Co. | Gilead Sciences Inc. | Johnson & Johnson | Pfizer Inc. | Regeneron Pharmaceuticals Inc. | Thermo Fisher Scientific Inc. | Vertex Pharmaceuticals Inc. | Pharmaceuticals, Biotechnology & Life Sciences | Health Care | ||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||||||||||||
| Current share price (P) | |||||||||||||||||
| No. shares of common stock outstanding | |||||||||||||||||
| Growth rate (g) | |||||||||||||||||
| Earnings per share (EPS) | |||||||||||||||||
| Next year expected EPS | |||||||||||||||||
| Operating profit per share | |||||||||||||||||
| Sales per share | |||||||||||||||||
| Book value per share (BVPS) | |||||||||||||||||
| Valuation Ratios (Price Multiples) | |||||||||||||||||
| Price to earnings (P/E) | |||||||||||||||||
| Price to operating profit (P/OP) | |||||||||||||||||
| Price to sales (P/S) | |||||||||||||||||
| Price to book value (P/BV) | |||||||||||||||||
Based on: 10-K (reporting date: 2024-12-31).
If the company price multiple is lower then the price multiple of benchmark then company stock is relatively undervalued.
Otherwise, if the company price multiple is higher then the price multiple of benchmark then company stock is relatively overvalued.
Historical Valuation Ratios (Summary)
Merck & Co. Inc., historical price multiples
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Price to earnings (P/E) | ||||||
| Price to operating profit (P/OP) | ||||||
| Price to sales (P/S) | ||||||
| Price to book value (P/BV) |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
- Price to Earnings (P/E) Ratio
- The P/E ratio experienced a significant decline from 26.72 in 2020 to 14.78 in 2021, indicating a more favorable valuation or increased earnings relative to price. It then rose moderately to 19.21 in 2022. A pronounced anomaly was observed in 2023, with the ratio spiking to 893.99, which suggests either an unusual market reaction or a very low or negative earnings figure affecting the calculation. By 2024, the ratio normalized sharply back down to 13.49, the lowest in the five-year span, implying improved earnings or a price adjustment.
- Price to Operating Profit (P/OP) Ratio
- The P/OP ratio mirrored some trends of the P/E ratio, decreasing notably from 23.89 in 2020 to 15.39 in 2021 and remaining relatively stable at 15.55 in 2022. Like the P/E ratio, it showed an extreme increase in 2023 to 138.56, though less dramatic than the P/E spike, before dropping to 11.6 in 2024, indicating a return to a relatively lower valuation based on operating profit. This volatility suggests operational profit fluctuations or market volatility in 2023.
- Price to Sales (P/S) Ratio
- The P/S ratio showed a steady increase from 3.93 in 2020 to 3.96 in 2021 and then more pronounced growth to 4.71 in 2022 and further to 5.43 in 2023. However, this upward trend reversed in 2024, falling to 3.6, the lowest value in the timeline except for 2020. The ratio's gradual rise, followed by a drop, may reflect changes in sales growth or shifts in investor sentiment regarding revenue valuation.
- Price to Book Value (P/BV) Ratio
- The P/BV ratio decreased from 7.46 in 2020 to 5.05 in 2021, suggesting a lower market valuation relative to net asset value. It then increased to 6.07 in 2022 and experienced a peak of 8.68 in 2023, reflecting heightened market valuation relative to book value. Similar to other ratios, it decreased again in 2024 to 4.99, the lowest point in the observed period, indicating a potential revaluation or asset base change.
Price to Earnings (P/E)
Merck & Co. Inc., historical P/E calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Net income attributable to Merck & Co., Inc. (in millions) | ||||||
| Earnings per share (EPS)2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/E ratio4 | ||||||
| Benchmarks | ||||||
| P/E Ratio, Competitors5 | ||||||
| AbbVie Inc. | ||||||
| Amgen Inc. | ||||||
| Bristol-Myers Squibb Co. | ||||||
| Danaher Corp. | ||||||
| Eli Lilly & Co. | ||||||
| Gilead Sciences Inc. | ||||||
| Johnson & Johnson | ||||||
| Pfizer Inc. | ||||||
| Regeneron Pharmaceuticals Inc. | ||||||
| Thermo Fisher Scientific Inc. | ||||||
| Vertex Pharmaceuticals Inc. | ||||||
| P/E Ratio, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | ||||||
| P/E Ratio, Industry | ||||||
| Health Care | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 Data adjusted for splits and stock dividends.
2 2024 Calculation
EPS = Net income attributable to Merck & Co., Inc. ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of Merck & Co. Inc. Annual Report.
4 2024 Calculation
P/E ratio = Share price ÷ EPS
= ÷ =
5 Click competitor name to see calculations.
- Share Price
- The share price exhibited an overall increasing trend from 74.62 US dollars at the end of 2020 to a peak of 128.84 US dollars by the end of 2023. However, in 2024, the share price declined significantly to 91.43 US dollars, representing a notable reversal of the prior upward trend.
- Earnings Per Share (EPS)
- EPS more than doubled from 2.79 US dollars in 2020 to 5.16 US dollars in 2021 and continued increasing modestly to 5.72 US dollars in 2022. In 2023, EPS dropped sharply to 0.14 US dollars, indicating a severe decline in profitability for that period. This was followed by a substantial recovery in 2024 when EPS rose to 6.78 US dollars, surpassing previous years' levels.
- Price-to-Earnings (P/E) Ratio
- The P/E ratio decreased from 26.72 in 2020 to 14.78 in 2021, suggesting that the stock price growth outpaced earnings or that the stock became more attractively valued relative to earnings. It then increased to 19.21 in 2022 before experiencing an extreme spike to 893.99 in 2023. This spike corresponds with the drastic decline in EPS during the same year, causing the ratio to become extremely high due to very low earnings. In 2024, the P/E ratio normalized back to 13.49, reflecting the earnings recovery and the decrease in share price.
Price to Operating Profit (P/OP)
Merck & Co. Inc., historical P/OP calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Operating income (in millions) | ||||||
| Operating profit per share2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/OP ratio4 | ||||||
| Benchmarks | ||||||
| P/OP Ratio, Competitors5 | ||||||
| AbbVie Inc. | ||||||
| Amgen Inc. | ||||||
| Bristol-Myers Squibb Co. | ||||||
| Danaher Corp. | ||||||
| Eli Lilly & Co. | ||||||
| Gilead Sciences Inc. | ||||||
| Johnson & Johnson | ||||||
| Pfizer Inc. | ||||||
| Regeneron Pharmaceuticals Inc. | ||||||
| Thermo Fisher Scientific Inc. | ||||||
| Vertex Pharmaceuticals Inc. | ||||||
| P/OP Ratio, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | ||||||
| P/OP Ratio, Industry | ||||||
| Health Care | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 Data adjusted for splits and stock dividends.
2 2024 Calculation
Operating profit per share = Operating income ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of Merck & Co. Inc. Annual Report.
4 2024 Calculation
P/OP ratio = Share price ÷ Operating profit per share
= ÷ =
5 Click competitor name to see calculations.
- Share Price Trend
- The share price exhibits a general upward trend from 74.62 US$ in 2020 to a peak of 128.84 US$ in 2023, followed by a notable decline to 91.43 US$ in 2024. The increase from 2020 to 2023 suggests strong market performance or investor confidence, while the drop in 2024 indicates some level of market correction or other influencing factors affecting the price negatively.
- Operating Profit per Share (OPPS) Trend
- The operating profit per share shows a steady increase from 3.12 US$ in 2020 to 7.07 US$ in 2022, signaling improving operational efficiency or profitability. There is a sharp decline to 0.93 US$ in 2023, which represents a significant drop in profitability. However, in 2024, the figure recovers strongly to 7.88 US$, surpassing the 2022 level, suggesting a rebound in operational performance or resolution of previous issues.
- Price to Operating Profit Ratio (P/OP) Trend
- The P/OP ratio decreases from 23.89 in 2020 to 15.39 in 2021 and remains stable at 15.55 in 2022, indicating a relatively consistent valuation relative to operating profit. A striking increase to 138.56 is observed in 2023, reflecting a disconnect where the share price remains relatively high while operating profit per share collapses substantially. By 2024, the P/OP ratio falls dramatically to 11.6, the lowest in the period, suggesting that the share price decreased significantly relative to the recovered operating profit.
- Overall Insights
- The data reflects a volatile period for operational profitability and share price valuation. The firm achieved consistent improvements in operating profit per share and moderate share price growth through 2022. The sharp disruption in 2023, characterized by a collapse in operating profit and a disproportionately high P/OP ratio, indicates a significant adverse event or operational challenge. The subsequent recovery in 2024 with improved profit and corrected valuation suggests resilience but also highlights fluctuations in market perceptions and fundamental performance within the analyzed timeframe.
Price to Sales (P/S)
Merck & Co. Inc., historical P/S calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Sales (in millions) | ||||||
| Sales per share2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/S ratio4 | ||||||
| Benchmarks | ||||||
| P/S Ratio, Competitors5 | ||||||
| AbbVie Inc. | ||||||
| Amgen Inc. | ||||||
| Bristol-Myers Squibb Co. | ||||||
| Danaher Corp. | ||||||
| Eli Lilly & Co. | ||||||
| Gilead Sciences Inc. | ||||||
| Johnson & Johnson | ||||||
| Pfizer Inc. | ||||||
| Regeneron Pharmaceuticals Inc. | ||||||
| Thermo Fisher Scientific Inc. | ||||||
| Vertex Pharmaceuticals Inc. | ||||||
| P/S Ratio, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | ||||||
| P/S Ratio, Industry | ||||||
| Health Care | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 Data adjusted for splits and stock dividends.
2 2024 Calculation
Sales per share = Sales ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of Merck & Co. Inc. Annual Report.
4 2024 Calculation
P/S ratio = Share price ÷ Sales per share
= ÷ =
5 Click competitor name to see calculations.
- Share Price
- The share price demonstrated an overall upward trend from 74.62 US$ in 2020 to a peak of 128.84 US$ in 2023, representing a notable increase. However, in 2024, the share price experienced a decline to 91.43 US$, indicating a potential market adjustment or correction after the rapid growth of previous years.
- Sales Per Share
- Sales per share showed a consistent, moderate increase throughout the period, rising from 18.97 US$ in 2020 to 25.4 US$ in 2024. This steady growth suggests improving revenue generation relative to the number of shares outstanding, reflecting positively on the company’s operational performance.
- Price-to-Sales Ratio (P/S)
- The P/S ratio increased from 3.93 in 2020 to a peak of 5.43 in 2023, indicating that the market was valuing each dollar of sales increasingly higher during this period. However, in 2024, the ratio declined to 3.6, below the 2020 level, which could imply that the share price adjustment outpaced the growth in sales, leading to more conservative valuation multiples.
- Observations
- The simultaneous rise and subsequent correction in the share price, coupled with steady improvements in sales per share, highlight a period of heightened investor enthusiasm followed by a recalibration of market expectations. The P/S ratio’s decline below the 2020 figure in 2024 suggests that investors currently assign a more cautious valuation relative to sales compared to earlier years.
Price to Book Value (P/BV)
Merck & Co. Inc., historical P/BV calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Total Merck & Co., Inc. stockholders’ equity (in millions) | ||||||
| Book value per share (BVPS)2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/BV ratio4 | ||||||
| Benchmarks | ||||||
| P/BV Ratio, Competitors5 | ||||||
| AbbVie Inc. | ||||||
| Amgen Inc. | ||||||
| Bristol-Myers Squibb Co. | ||||||
| Danaher Corp. | ||||||
| Eli Lilly & Co. | ||||||
| Gilead Sciences Inc. | ||||||
| Johnson & Johnson | ||||||
| Pfizer Inc. | ||||||
| Regeneron Pharmaceuticals Inc. | ||||||
| Thermo Fisher Scientific Inc. | ||||||
| Vertex Pharmaceuticals Inc. | ||||||
| P/BV Ratio, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | ||||||
| P/BV Ratio, Industry | ||||||
| Health Care | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 Data adjusted for splits and stock dividends.
2 2024 Calculation
BVPS = Total Merck & Co., Inc. stockholders’ equity ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of Merck & Co. Inc. Annual Report.
4 2024 Calculation
P/BV ratio = Share price ÷ BVPS
= ÷ =
5 Click competitor name to see calculations.
- Share Price Trend
- The share price demonstrated a general upward trend from 2020 through 2023, increasing from $74.62 to a peak of $128.84 in 2023. However, there was a notable decline in 2024, with the share price falling to $91.43. This indicates a period of strong growth followed by a significant correction or market adjustment in the most recent year.
- Book Value Per Share (BVPS) Trend
- BVPS showed consistent growth from 2020 to 2022, rising from $10.01 to $18.12. In 2023, it decreased to $14.84 but then increased again in 2024 to $18.33, slightly surpassing the 2022 level. This pattern suggests underlying increases in net asset value offset by some fluctuations within the period.
- Price-to-Book Value (P/BV) Ratio Trend
- The P/BV ratio exhibited volatility over the period. Starting relatively high at 7.46 in 2020, it dropped to 5.05 in 2021, increased to 6.07 in 2022, and peaked sharply at 8.68 in 2023 before decreasing again to 4.99 in 2024. This implies changing market sentiment and valuation multiples, reflecting investor perceptions of company value relative to its book value.
- Overall Analysis
- The financial metrics show a company experiencing growth in intrinsic value, as reflected by increasing BVPS over the long term, albeit with some short-term fluctuations. Share price movements correspond to these changes but appear more volatile, particularly in the latest period. The P/BV ratio's fluctuations highlight varying market confidence over time, peaking when the share price was highest relative to book value, then retreating sharply. The decline in share price and P/BV ratio in the most recent year suggests a market reassessment or external factors impacting investor confidence despite stable or improving book value.