Merck & Company (MRK) AI Stock Analysis

• Market Cap: $205.18B
• Dividend Yield: 3.96%
• Average Volume (3M): 14.01M
• Price to Earnings (P/E): 11.9
• Beta (1Y): 0.36
• Revenue Growth: 4.40%
• EPS Growth: 654.93%
• Country: US
• Employees: 73,000
• Sector: Healthcare
• Sector Strength: 58
• Industry: Drug Manufacturers - General
• EPS (TTM): 2.22
• Shares Outstanding: 2,511,031,300
• 10 Day Avg. Volume: 13,736,294
• 30 Day Avg. Volume: 14,006,951
• PEG Ratio: 1.75
• Price to Book (P/B): 6.11
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 19.10
• Enterprise Value/Market Cap: 1.46
• Enterprise Value/Revenue: 1.18
• Enterprise Value/Gross Profit: 5.78
• Enterprise Value/Ebitda: 3.17
• 1Y Price Target: $100.73
• Price Target Upside: 23.28% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 17

• Rating: 76 Outperform
• Price Target: ―

Merck & Company shows a strong financial foundation, with excellent profitability and cash flow generation. However, technical indicators point to potential short-term challenges, and external factors like tariffs and foreign exchange could impact performance. The company is fairly valued with a good dividend yield, but strategic initiatives may be needed to address revenue and asset base declines.

Positive Factors

Business Development

Investors are looking for M&A moves from MRK, highlighting interest in the company's business development strategy.

Clinical Trial Success

MRK announced positive topline results from two Ph3 clinical trials, evaluating enlicitide decanoate for the treatment of adults with hyperlipidemia on lipid-lowering therapies.

Product Development

The company emphasized how it is advancing one of the industry’s broadest ADC programs across a number of different assets.

Negative Factors

Drug Pricing Uncertainty

Clarity on timing and range of outcomes for drug pricing objectives remains limited.

Growth Concerns

Questions remain on near-term growth despite historic success.

Product Conversion Challenges

The goal of 30–40% conversion from IV to subQ Keytruda within 18–24 months appears aggressive due to significant organizational and operational adjustments required from hospitals and clinics.

Merck & Company Business Overview & Revenue Model

Company Description

Merck & Company, Inc. (MRK), known as MSD outside the United States and Canada, is a global healthcare company that engages in the discovery, development, manufacturing, and marketing of a wide range of pharmaceutical products. The company operates in the healthcare sector, primarily focusing on prescription medicines, vaccines, biologic therapies, and animal health products. Merck's core product areas include oncology, vaccines, infectious diseases, and cardio-metabolic disorders, with a commitment to addressing unmet medical needs worldwide.

How the Company Makes Money

Merck & Company generates revenue primarily through the sales of its pharmaceutical products and vaccines. The company's revenue model is based on a diverse portfolio of patented drugs and vaccines, which are marketed globally. Key revenue streams include blockbuster drugs such as Keytruda, an immuno-oncology therapy used in cancer treatment, and Gardasil, a vaccine for human papillomavirus (HPV). Additionally, Merck earns income from its animal health division, which provides veterinary pharmaceuticals and services. Strategic partnerships and collaborations with other pharmaceutical and biotech companies, as well as investments in research and development, also play a significant role in driving Merck's earnings. The company benefits from a strong global presence, extensive patent portfolio, and continuous innovation in healthcare solutions.

Merck & Company Financial Statement Overview

Summary

Merck & Company displays a robust financial position with strong profitability, efficient cost management, and solid cash generation. The balance sheet is stable with manageable leverage. However, recent declines in revenue and asset base could pose future challenges if trends continue, suggesting a need for strategic initiatives to sustain growth and asset utilization.

Income Statement

Merck & Company has demonstrated consistent revenue growth from $41.52 billion in 2020 to $63.92 billion in TTM (Trailing-Twelve-Months) 2025. The gross profit margin is robust at 81.98% TTM, indicating efficient cost management. Net profit margin is strong at 27.27% TTM, reflecting solid profitability. The EBIT and EBITDA margins at 36.94% and 40.50% TTM, respectively, show a healthy operational performance. However, a slight decline in revenue from 2024 to 2025 suggests potential challenges in sustaining growth.

Balance Sheet

The balance sheet is solid, with a debt-to-equity ratio of 0.72 TTM, indicating a manageable level of leverage. Return on equity (ROE) is impressive at 36.07% TTM, showcasing effective use of shareholder funds. The equity ratio stands at 49.13% TTM, suggesting a stable capital structure. Nonetheless, a decreasing trend in total assets over the recent periods could indicate potential risks in asset management.

Cash Flow

Operating cash flow remains strong at $20.88 billion TTM, supporting healthy free cash flow of $17.04 billion. The free cash flow to net income ratio is substantial, highlighting solid cash generation relative to profits. However, a decrease in free cash flow growth rate from 2024 to 2025 may signal future liquidity pressures if not addressed.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
63.92B	64.17B	60.12B	59.28B	48.70B	41.52B
	Gross Profit
51.75B	48.98B	43.99B	41.87B	35.08B	27.90B
	EBIT
22.87B	22.69B	2.95B	19.40B	13.70B	6.08B
	EBITDA
27.30B	26.94B	6.91B	21.32B	17.90B	10.18B
	Net Income Common Stockholders
17.43B	17.12B	365.00M	14.52B	13.05B	7.07B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
9.23B	13.69B	7.09B	13.19B	8.10B	8.06B
	Total Assets
115.12B	117.11B	106.67B	109.16B	105.69B	91.59B
	Total Debt
34.84B	37.11B	36.27B	30.69B	33.10B	31.79B
	Net Debt
26.21B	23.87B	29.43B	18.00B	25.01B	23.73B
	Total Liabilities
66.72B	70.73B	69.04B	63.10B	67.44B	66.18B
	Stockholders Equity
48.34B	46.31B	37.58B	45.99B	38.18B	25.32B
Cash Flow		Free Cash Flow
17.04B	18.10B	9.14B	14.71B	9.66B	5.57B
	Operating Cash Flow
20.88B	21.47B	13.01B	19.09B	14.11B	10.25B
	Investing Cash Flow
-7.84B	-7.73B	-14.08B	-4.96B	-16.55B	-9.44B
	Financing Cash Flow
-9.97B	-7.03B	-4.81B	-9.12B	2.59B	-2.83B

Merck & Company Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 81.71
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MRK, the sentiment is Neutral. The current price of 81.71 is above the 20-day moving average (MA) of 78.17, above the 50-day MA of 79.19, and below the 200-day MA of 94.64, indicating a neutral trend. The MACD of 0.41 indicates Negative momentum. The RSI at 59.03 is Neutral, neither overbought nor oversold. The STOCH value of 87.06 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for MRK.

Merck & Company Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NVS	80 Outperform	$227.61B	18.57	32.95%	3.34%	6.30%	-13.28%
AZN	77 Outperform	$230.93B	29.68	19.81%	2.82%	15.48%	22.70%
MRK	76 Outperform	$205.18B	11.90	39.31%	3.96%	4.40%	654.93%
AMGN	75 Outperform	$158.74B	26.95	105.67%	3.22%	15.59%	56.99%
PFE	73 Outperform	$139.52B	17.79	8.62%	7.01%	13.38%	―
SNY	67 Neutral	$122.32B	20.67	7.34%	4.45%	-4.57%	2.96%
Sector *	54 Neutral	$5.37B	3.26	-45.10%	3.30%	16.81%	0.02%

Merck & Company Corporate Events

Merck & Co. Concludes Annual Shareholders Meeting

On May 27, 2025, Merck & Co., Inc. held its Annual Meeting of Shareholders where several key decisions were made. The meeting resulted in the election of board members, approval of executive compensation, and ratification of the company’s accounting firm for 2025. However, shareholder proposals regarding human rights impact assessment, tax transparency, DEI goals in executive pay, and civil liberties in advertising services were not approved.

The most recent analyst rating on (MRK) stock is a Buy with a $145.00 price target. To see the full list of analyst forecasts on Merck & Company stock, see the MRK Stock Forecast page.