Organon (OGN) AI Stock Analysis

• Market Cap: $2.36B
• Dividend Yield: 6.62%
• Average Volume (3M): 4.38M
• Price to Earnings (P/E): 3.5
• Beta (1Y): 0.40
• Revenue Growth: -1.02%
• EPS Growth: -30.57%
• Country: US
• Employees: 10,000
• Sector: Healthcare
• Sector Strength: 45
• Industry: Drug Manufacturers - General
• EPS (TTM): 1.00
• Shares Outstanding: 259,965,580
• 10 Day Avg. Volume: 3,908,367
• 30 Day Avg. Volume: 4,378,597
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 4.59
• Enterprise Value/Revenue: 1.72
• Enterprise Value/Gross Profit: 3.06
• Enterprise Value/Ebitda: 7.13
• 1Y Price Target: $9.50
• Price Target Upside: 4.74% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 0

• Rating: 51 Neutral
• Price Target: $9.50 ▲(4.74% Upside)

Organon's overall stock score is primarily impacted by its financial challenges, including high leverage and declining revenue. However, the stock's low valuation and positive corporate event regarding HADLIMA provide some upside potential. Technical indicators suggest a bearish trend, while the earnings call highlighted both strengths in EBITDA and challenges in revenue.

Positive Factors

Debt Management

Organon & Co. plans to delever quickly by reallocating approximately $200 million per year from its dividend cut towards debt repayment.

Revenue Growth

Organon & Co. expects low- to mid-single digit revenue growth post-2025, indicating a stable outlook for future earnings.

Negative Factors

Dividend Reduction

Organon plans to cut its dividend by 90%, ending a nearly 2-year investor debate, which might concern income-focused investors.

Financial Health

Updated financials include a $6 million charge reported in the first quarter, which could impact the company's financial health.

Market Position

The stock is positioned as a low growth story with an LOE overhang, suggesting limited potential for significant valuation increases.

Organon Business Overview & Revenue Model

Company Description

Organon & Co., a health care company, develops and delivers health solutions through a portfolio of prescription therapies in the United States and internationally. Its women's health portfolio comprises contraception and fertility brands, such as Nexplanon/Implanon, a long-acting reversible contraceptive. The company's biosimilars portfolio consists of three immunology products, such as Brenzys, Renflexis, and Hadlima, as well as two oncology products, including Ontruzant and Aybintio. It also offers cardiovascular products, consisting of several cholesterol-modifying medicines under the Zetia, Ezetrol, Vytorin, Inegy, Rosuzet, and Zocor brands; Cozaar and Hyzaar for the treatment of hypertension; respiratory products for various treatments to control and prevent symptoms caused by asthma under the Singulair, Dulera, Zenhale, and Asmanex brand names; and Singulair, Nasonex, Clarinex, and Aerius for treating seasonal allergic rhinitis. In addition, the company provides dermatology products under the Diprosone and Elocon brand; bone health portfolio, including Fosamax brand name; non-opioid pain management products under the Arcoxia, Diprospan, and Celestone brand names; Proscar for the treatment of symptomatic benign prostatic hyperplasia; and Propecia for the treatment of male pattern hair loss. The company sells its products primarily to drug wholesalers and retailers, hospitals, and government agencies, as well as managed health care providers, such as health maintenance organizations, pharmacy benefit managers, and other institutions. Organon & Co. was incorporated in 2020 and is based in Jersey City, New Jersey.

How the Company Makes Money

Organon makes money through the sale of its healthcare products and solutions across its three main business segments. In Women's Health, revenue is generated from contraceptives, fertility solutions, and hormone therapies. The Biosimilars segment contributes to earnings through the development and commercialization of biologic medicines that are highly similar to already approved reference products, offering cost-effective alternatives. The Established Brands segment, which consists of a wide range of legacy pharmaceutical products, provides a stable revenue stream as these products continue to be used in various therapeutic areas. Additionally, Organon engages in strategic partnerships and collaborations to enhance its product offerings and expand market reach, further contributing to its revenue.

Organon Financial Statement Overview

Summary

Organon is facing financial challenges with declining revenue and profitability, high leverage, and reduced cash flow generation. The company needs to address its high debt levels and improve operational efficiency to stabilize its financial position.

Income Statement

Organon's income statement shows a significant decline in revenue with a TTM revenue growth rate of -25.51%. Gross profit margin is relatively stable at 57.18%, but net profit margin has decreased to 11.92%. EBIT and EBITDA margins have also declined, indicating reduced operational efficiency. The company faces challenges in maintaining revenue and profitability.

Balance Sheet

The balance sheet reveals a high debt-to-equity ratio of 16.52, indicating significant leverage. Return on equity is low at 1.82%, reflecting limited profitability relative to shareholder equity. The equity ratio is weak, suggesting potential financial instability. The company needs to address its high leverage to improve financial health.

Cash Flow

Cash flow analysis shows a decline in free cash flow growth by -44.84% TTM, indicating reduced cash generation. The operating cash flow to net income ratio is 0.36, suggesting moderate cash conversion efficiency. The free cash flow to net income ratio is 0.62, which is decent but declining. The company needs to enhance its cash flow management.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	6.28B	6.40B	6.26B	6.17B	6.30B	8.10B
Gross Profit	3.53B	3.71B	3.75B	3.88B	3.92B	4.75B
EBITDA	1.52B	1.61B	1.44B	1.69B	1.81B	2.99B
Net Income	700.00M	864.00M	1.02B	917.00M	1.35B	2.16B
Balance Sheet
Total Assets	13.50B	13.10B	12.06B	10.96B	10.68B	10.43B
Cash, Cash Equivalents and Short-Term Investments	599.00M	675.00M	693.00M	706.00M	737.00M	500.00M
Total Debt	8.90B	8.88B	8.76B	8.91B	9.13B	31.00M
Total Liabilities	12.77B	12.63B	12.13B	11.85B	12.19B	11.25B
Stockholders Equity	733.00M	472.00M	-70.00M	-892.00M	-1.51B	-820.00M
Cash Flow
Free Cash Flow	323.22M	588.00M	538.00M	431.00M	1.97B	1.91B
Operating Cash Flow	531.29M	939.00M	799.00M	858.00M	2.46B	2.19B
Investing Cash Flow	-371.21M	-513.00M	-260.00M	-420.00M	-481.00M	-258.00M
Financing Cash Flow	-160.30M	-368.00M	-569.00M	-433.00M	-1.33B	-2.17B

Organon Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 9.07
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For OGN, the sentiment is Negative. The current price of 9.07 is below the 20-day moving average (MA) of 9.27, below the 50-day MA of 9.63, and below the 200-day MA of 12.47, indicating a bearish trend. The MACD of -0.12 indicates Negative momentum. The RSI at 43.22 is Neutral, neither overbought nor oversold. The STOCH value of 30.96 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for OGN.

Organon Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PFE	82 Outperform	$142.93B	13.76	12.16%	6.86%	14.72%	―
GSK	78 Outperform	$79.75B	18.25	23.04%	4.13%	3.46%	-13.29%
SNY	76 Outperform	$122.44B	12.77	8.39%	4.40%	-9.32%	120.62%
GRFS	71 Outperform	$8.58B	20.48	5.41%	1.45%	10.05%	98.22%
BMY	68 Neutral	$95.95B	19.34	29.31%	5.21%	2.57%	―
Sector *	51 Neutral	$7.83B	-0.15	-40.10%	2.29%	21.46%	-2.01%
OGN	51 Neutral	$2.36B	3.50	159.64%	6.62%	-1.02%	-30.57%

Organon Corporate Events

Organon Reports Q2 2025 Financial Results and Guidance

Organon reported its financial results for the second quarter of 2025, with a revenue of $1.594 billion, a slight decrease from the previous year. The company achieved a net income of $145 million and repaid $345 million of long-term debt, aiming for a net debt to Adjusted EBITDA ratio of less than 4.0x by year-end. Organon raised its full-year revenue guidance to between $6.275 billion and $6.375 billion, while maintaining its Adjusted EBITDA margin guidance. The quarter saw growth in women’s health and biosimilars, offset by declines in established brands due to the loss of exclusivity in key markets.

Organon Concludes Annual Meeting with Key Decisions

On June 10, 2025, Organon held its Annual Meeting where stockholders voted on five proposals. The meeting saw approximately 83% of shares represented, with key decisions including the election of eleven directors, approval of executive compensation, amendment of the 2021 Incentive Stock Plan, ratification of PricewaterhouseCoopers LLP as the accounting firm, and rejection of a stockholder proposal for a new Director Election Resignation Guideline.

Organon Receives FDA Interchangeability for HADLIMA

On May 27, 2025, Organon & Co. announced that the U.S. Food and Drug Administration (FDA) granted interchangeability designation to their product HADLIMA™ (adalimumab-bwwd) as a biosimilar to Humira®. This designation allows pharmacists to substitute HADLIMA for Humira without consulting prescribers, potentially increasing patient access and reducing costs. The designation is based on studies demonstrating comparable pharmacokinetics, efficacy, safety, and immunogenicity with Humira. Organon emphasizes that this approval could lead to significant savings for patients and the healthcare system.