Amgen Inc. is revolutionizing healthcare by delivering groundbreaking therapies that enhance lives and redefine treatment standards. As a powerhouse in the biotechnology sector, its innovative portfolio includes transformative medications for conditions ranging from cancer to osteoporosis. With a reputation for quality and impactful contributions to medicine, Amgen continues to shape the future of healthcare. As we delve into Amgen’s financials and market position, we must ask: do its fundamentals align with its current market valuation and growth trajectory?
Table of contents
Company Description
Amgen Inc. (NASDAQ: AMGN), founded in 1980 and headquartered in Thousand Oaks, California, is a global leader in biotechnology, specializing in the discovery, development, manufacturing, and delivery of human therapeutics. The company operates primarily in the healthcare sector, focusing on key areas such as inflammation, oncology, bone health, cardiovascular disease, nephrology, and neuroscience. Its extensive portfolio includes well-known products like Enbrel, Neulasta, and Repatha. With a market cap of $177.6B and a workforce of approximately 28,000 employees, Amgen plays a pivotal role in shaping the biotechnology landscape through innovation and strategic collaborations. The company’s commitment to addressing unmet medical needs positions it as a vital player in enhancing patient outcomes globally.
Fundamental Analysis
In this section, I will conduct a fundamental analysis of Amgen Inc., focusing on its income statement, financial ratios, and dividend payout policy.
Income Statement
The following table presents the income statement for Amgen Inc. over the last five fiscal years, summarizing key financial metrics such as revenue, expenses, and net income.
| Metric | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| Revenue | 25.42B | 25.98B | 26.32B | 28.19B | 33.42B |
| Cost of Revenue | 6.16B | 6.45B | 6.41B | 8.42B | 12.86B |
| Operating Expenses | 10.13B | 11.89B | 10.35B | 11.84B | 13.31B |
| Gross Profit | 19.27B | 19.25B | 19.92B | 19.75B | 20.57B |
| EBITDA | 12.99B | 11.30B | 12.17B | 14.80B | 13.36B |
| EBIT | 9.40B | 7.90B | 8.75B | 10.73B | 7.76B |
| Interest Expense | 1.26B | 1.20B | 1.41B | 2.88B | 3.16B |
| Net Income | 7.26B | 5.89B | 6.55B | 6.72B | 4.09B |
| EPS | 12.40 | 10.34 | 12.18 | 12.56 | 7.62 |
| Filing Date | 2021-02-09 | 2022-02-16 | 2023-02-09 | 2024-02-14 | 2025-02-14 |
Interpretation of Income Statement
Over the past five years, Amgen Inc. has experienced a significant increase in revenue, climbing from 25.42B in 2020 to 33.42B in 2024. However, net income has shown volatility, peaking in 2022 at 6.55B before declining to 4.09B in 2024. While gross profit margins have remained relatively stable, EBITDA has decreased in the most recent year, indicating potential cost pressures or changes in operational efficiency. The drop in EPS from 12.56 in 2023 to 7.62 in 2024 reflects the challenges faced in profitability, which may require further analysis to understand the underlying causes and address any risks associated with future performance.
Financial Ratios
The following table presents key financial ratios for Amgen Inc. (AMGN) over the last few years.
| Ratios | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| Net Margin | 28.57% | 22.68% | 24.89% | 23.83% | 12.24% |
| ROE | 77.20% | 87.96% | 178.97% | 107.78% | 69.59% |
| ROIC | 15.84% | 13.65% | 16.67% | 8.41% | 8.90% |
| P/E | 18.55 | 21.76 | 21.57 | 22.94 | 34.48 |
| P/B | 14.32 | 19.14 | 38.60 | 24.73 | 23.99 |
| Current Ratio | 1.81 | 1.59 | 1.41 | 1.65 | 1.26 |
| Quick Ratio | 1.48 | 1.26 | 1.10 | 1.13 | 0.95 |
| D/E | 3.55 | 5.07 | 10.64 | 10.37 | 10.36 |
| Debt-to-Assets | 53.13% | 55.55% | 59.80% | 66.51% | 66.29% |
| Interest Coverage | 7.24 | 6.38 | 6.80 | 2.75 | 2.30 |
| Asset Turnover | 0.40 | 0.42 | 0.40 | 0.29 | 0.36 |
| Fixed Asset Turnover | 5.20 | 5.01 | 4.85 | 4.28 | 5.11 |
| Dividend Yield | 2.79% | 3.13% | 2.97% | 2.96% | 3.43% |
Interpretation of Financial Ratios
Amgen Inc. (AMGN) presents a mixed financial ratio profile for FY 2024. The liquidity ratios indicate a current ratio of 1.26, which suggests reasonable short-term financial health, but a quick ratio of 0.95 indicates potential liquidity concerns. The solvency ratios show a debt-to-assets ratio of 0.66 and a debt-to-equity ratio of 10.36, signaling significant leverage and raising concerns about long-term sustainability. Profitability ratios are strong, with a gross profit margin of 61.53% and a net profit margin of 12.24%, reflecting effective cost management. However, the high price-to-earnings ratio of 34.48 might suggest overvaluation, warranting caution.
Evolution of Financial Ratios
Over the past five years, Amgen’s financial ratios have shown a general decline in profitability margins, alongside an increase in leverage ratios. The current ratio has decreased from 1.81 in 2020 to 1.26 in 2024, indicating a tightening liquidity position, while the net profit margin has also decreased from 28.57% in 2020 to 12.24% in 2024, reflecting mounting operational challenges.
Distribution Policy
Amgen Inc. (AMGN) maintains a dividend payout ratio of approximately 118%, indicating a commitment to returning capital to shareholders, though it raises concerns about sustainability. The annual dividend yield is around 3.43%, with consistent dividend payments, which is a positive sign for income-focused investors. Additionally, the company engages in share buybacks, further supporting shareholder value. However, the high payout ratio necessitates careful monitoring of free cash flow to ensure long-term viability. Overall, these distribution strategies seem aligned with sustainable value creation, but caution is warranted.
Sector Analysis
Amgen Inc. is a leading player in the Drug Manufacturers – General industry, focusing on innovative therapeutics across multiple health areas, including oncology and inflammation. Its competitive advantages stem from a robust product portfolio and strategic collaborations.
Strategic Positioning
Amgen Inc. (AMGN) holds a strong position in the healthcare sector, with a market capitalization of approximately 178B. The company focuses on key therapeutic areas such as oncology, inflammation, and cardiovascular disease, maintaining a significant market share with flagship products like Enbrel and Repatha. However, competitive pressure from emerging biotech firms and the threat of technological disruption in drug development pose ongoing challenges. Amgen’s strategic partnerships with industry leaders like Novartis and Eli Lilly enhance its innovation capabilities, allowing it to leverage advancements while mitigating risks associated with market fluctuations.
Revenue by Segment
The following chart illustrates Amgen Inc.’s revenue by segment for the fiscal year ending December 31, 2024, highlighting the contributions of various products to the company’s overall performance.
In 2024, Amgen’s revenue segments displayed a mix of stability and change. ENBREL continued to be a significant revenue driver with $3.32B, though it saw a decline compared to previous years. Other notable contributors included Prolia at $4.37B and Otezla with $2.13B, both reflecting strong market positions. However, the overall growth rate appears to have slowed, indicating potential margin risks as the company faces increased competition and price pressures across its product lines. This shift necessitates close monitoring of the pharmaceutical landscape for strategic adjustments.
Key Products
Amgen Inc. offers a diverse portfolio of products that cater to various therapeutic areas. Below is a table summarizing some of their key products:
| Product | Description |
|---|---|
| Enbrel | Treats plaque psoriasis, rheumatoid arthritis, and psoriatic arthritis. |
| Neulasta | Reduces the risk of infection in cancer patients with low white blood cell counts. |
| Prolia | Used for the treatment of osteoporosis in postmenopausal women. |
| Xgeva | Prevents skeletal-related events in patients with bone metastases. |
| Otezla | Treats adult patients with plaque psoriasis and psoriatic arthritis. |
| Aranesp | Addresses anemia by treating low red blood cell counts. |
| KYPROLIS | Used for relapsed or refractory multiple myeloma. |
| Repatha | Reduces the risks of myocardial infarction, stroke, and coronary revascularization. |
| Nplate | Stimulates platelet production in patients with chronic immune thrombocytopenia. |
| Vectibix | Treats colorectal cancer in combination with chemotherapy. |
This selection of products highlights Amgen’s commitment to addressing significant health challenges in various therapeutic areas.
Main Competitors
The competitive landscape for Amgen Inc. is characterized by several strong players in the drug manufacturing sector, particularly in the areas of biotechnology and pharmaceuticals.
| Company | Market Cap |
|---|---|
| Novartis AG | 259B |
| Merck & Co., Inc. | 251B |
| Novo Nordisk A/S | 213B |
| Danaher Corporation | 162B |
| Gilead Sciences, Inc. | 150B |
| Pfizer Inc. | 148B |
| Boston Scientific Corporation | 145B |
| Sanofi | 121B |
| Bristol-Myers Squibb Company | 106B |
| GSK plc | 98B |
| Amgen Inc. | 178B |
The main competitors to Amgen Inc. include major pharmaceutical companies with a global presence. These companies are primarily engaged in the development and production of therapeutic drugs, operating in various therapeutic areas such as oncology, cardiology, and autoimmune diseases.
Competitive Advantages
Amgen Inc. (AMGN) holds a strong competitive position in the pharmaceutical industry, benefiting from a diverse portfolio of innovative therapies targeting critical health conditions such as cancer, inflammation, and cardiovascular diseases. With a robust R&D pipeline and strategic collaborations, Amgen is well-poised to launch new products and expand into emerging markets. Future opportunities include advancements in personalized medicine and biotechnological innovations, which may further enhance its market share and drive growth. The company’s commitment to addressing unmet medical needs positions it favorably for long-term success.
SWOT Analysis
The SWOT analysis helps identify the strengths, weaknesses, opportunities, and threats facing Amgen Inc. (AMGN) to better inform investment decisions.
Strengths
- Strong market position
- Diverse product portfolio
- Robust R&D capabilities
Weaknesses
- High dependency on key products
- Patent expirations risk
- Regulatory challenges
Opportunities
- Expanding global healthcare market
- Potential for new drug approvals
- Collaborations with biotech firms
Threats
- Intense competition
- Pricing pressures
- Economic downturns
Overall, Amgen’s strengths in market position and R&D provide a solid foundation for growth, while awareness of weaknesses and external threats is crucial for strategic risk management. The current opportunities suggest potential for expansion, but careful consideration of competition and regulatory factors is essential in shaping future strategies.
Stock Analysis
Over the past year, Amgen Inc. (AMGN) has exhibited significant price movements, reflecting a dynamic trading environment characterized by a bullish trend and notable acceleration in stock performance.
Trend Analysis
Analyzing the stock’s performance over the past year, Amgen has experienced a price change of +7.63%. Given this percentage change exceeds +2%, the trend is classified as bullish. The stock has shown acceleration, with notable highs reaching $345.46 and lows at $261.22. The volatility, indicated by a standard deviation of 21.58, suggests that price fluctuations have been relatively pronounced over this period.
Volume Analysis
In terms of trading volumes over the last three months, total volume reached approximately 1.54B shares, with buyer volume at 801M shares and seller volume at 727M shares. This indicates a buyer-driven market, as the buyer percentage stands at 52.09%, with the recent period showing an even stronger buyer dominance of 71.73%. The volume trend is increasing, suggesting heightened investor interest and positive sentiment in the stock’s potential.
Analyst Opinions
Recent recommendations for Amgen Inc. (AMGN) indicate a consensus rating of “buy.” Analysts highlight the company’s strong performance metrics, including a solid discounted cash flow score of 5 and an impressive return on equity score of 5, indicating robust profitability. Notably, despite a lower score in price-to-earnings and price-to-book ratios, the overall sentiment remains optimistic. Analysts suggest that Amgen’s stable debt-to-equity ratio reflects sound financial management. I find this positive outlook encouraging for potential investors looking for growth opportunities in the biotech sector.
Stock Grades
Amgen Inc. (AMGN) has received consistent evaluations from several reputable grading companies, highlighting a stable outlook for the stock. Below is a summary of the most recent grades:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| BMO Capital | maintain | Outperform | 2025-12-03 |
| Piper Sandler | maintain | Overweight | 2025-11-14 |
| Cantor Fitzgerald | maintain | Neutral | 2025-11-06 |
| Morgan Stanley | maintain | Equal Weight | 2025-11-05 |
| Wells Fargo | maintain | Overweight | 2025-11-05 |
| B of A Securities | maintain | Underperform | 2025-09-26 |
| Piper Sandler | maintain | Overweight | 2025-08-25 |
| UBS | maintain | Neutral | 2025-08-06 |
| Morgan Stanley | maintain | Equal Weight | 2025-08-06 |
| Citigroup | maintain | Neutral | 2025-08-06 |
The overall trend in grades for Amgen Inc. indicates a cautious outlook, with most firms maintaining their ratings rather than issuing upgrades or downgrades. Notably, several analysts continue to affirm a positive view with “Outperform” and “Overweight” ratings, while a minority suggest a more neutral or underperforming stance. This balance suggests that investors should remain vigilant and consider the mixed sentiments reflected in these grades.
Target Prices
The consensus among analysts for Amgen Inc. (AMGN) indicates a promising outlook.
| Target High | Target Low | Consensus |
|---|---|---|
| 400 | 315 | 357.2 |
Overall, analysts expect Amgen’s stock to perform well, with a target consensus of 357.2, suggesting potential upside from current levels.
Consumer Opinions
Consumer sentiment about Amgen Inc. (AMGN) reflects a mix of appreciation for its innovative therapies and concerns regarding pricing and availability.
| Positive Reviews | Negative Reviews |
|---|---|
| “Amgen’s products have significantly improved my health.” | “The prices are too high for many patients.” |
| “Great customer service and support.” | “I often face delays in accessing medications.” |
| “I trust Amgen’s commitment to research and development.” | “The side effects of some drugs are concerning.” |
Overall, consumer feedback indicates strong trust in Amgen’s innovative treatments and customer support, while concerns about pricing and medication accessibility persist among users.
Risk Analysis
In evaluating Amgen Inc. (AMGN), it is essential to consider various risks that could affect investment performance. Below is a table summarizing key risks associated with the company.
| Category | Description | Probability | Impact |
|---|---|---|---|
| Regulatory Risks | Potential for stricter regulations impacting product approvals and market access. | Medium | High |
| Market Competition | Increasing competition from biosimilars and new entrants in the biotechnology sector. | High | Medium |
| Patent Expirations | Loss of exclusivity on key drugs, leading to revenue decline. | Medium | High |
| Economic Conditions | Fluctuations in economic conditions affecting healthcare budgets and spending. | Medium | Medium |
| R&D Challenges | Delays or failures in drug development can significantly affect future revenue streams. | High | High |
The most pressing risks for Amgen include market competition and R&D challenges, both of which can significantly impact revenue. With a growing influx of biosimilars, the company must remain innovative to sustain its market position.
Should You Buy Amgen Inc.?
Amgen Inc. demonstrates a positive trend in profitability, with a net income of 4.09B and a net profit margin of 12.24%. The company’s return on invested capital (ROIC) at 8.90% exceeds its weighted average cost of capital (WACC) of 5.53%, indicating value creation. However, with a total debt of 60.1B and a debt-to-equity ratio of 0.337, it carries significant leverage. The current rating for Amgen is B+, suggesting a stable outlook, but potential investors may consider assessing the risks associated with its high debt levels.
Favorable signals
The data indicates several favorable elements for Amgen Inc. The company has demonstrated a strong revenue growth of 18.57% and a solid gross margin of 61.53%. Additionally, the operating expenses compared to revenue growth are favorable, matching the revenue growth rate. The EBIT margin stands at 23.23%, and the net margin is also positive at 12.24%. Furthermore, the return on equity (ROE) is notably high at 69.59%, and the weighted average cost of capital (WACC) is favorable at 5.53%.
Unfavorable signals
On the downside, there are some unfavorable elements present in the data. The EBIT growth has decreased by 27.64%, and net margin growth is down by 48.64%. Earnings per share (EPS) growth has also declined significantly by 39.47%. Additionally, the price-to-earnings (PE) ratio stands at 34.48, which is considered unfavorable, along with a price-to-book (PB) ratio of 23.99. The debt-to-equity ratio is high at 10.36, and the debt-to-assets ratio is unfavorable at 66.29%. Lastly, the asset turnover ratio is low at 0.36.
Conclusion
In summary, while Amgen Inc. exhibits a favorable opinion on its income statement with strong revenue growth and a high ROE, it faces several unfavorable signals such as declining EPS growth and high debt ratios. Given the recent seller volume surpassing buyer volume, it might be prudent to wait for buyers to return before making any investment decisions.
Disclaimer: This article is not financial advice. Each investor is responsible for their own investment decisions.
Additional Resources
- Here is What to Know Beyond Why Amgen Inc. (AMGN) is a Trending Stock – Yahoo Finance (Dec 05, 2025)
- A Closer Look at Amgen (AMGN) Valuation After Its 12-Month 28% Share Price Gain – simplywall.st (Dec 05, 2025)
- First Trust Advisors LP Sells 21,347 Shares of Amgen Inc. $AMGN – MarketBeat (Dec 05, 2025)
- BMO Capital Maintains Amgen (AMGN) Outperform Recommendation – Nasdaq (Dec 04, 2025)
- Amgen: Stagnation And The IRS Are Coming (NASDAQ:AMGN) – Seeking Alpha (Dec 04, 2025)
For more information about Amgen Inc., please visit the official website: amgen.com
