Organon (OGN) AI Stock Analysis

• Market Cap: $2.72B
• Dividend Yield: 5.53%
• Average Volume (3M): 4.00M
• Price to Earnings (P/E): 3.9
• Beta (1Y): 0.36
• 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: 3,732,846
• 30 Day Avg. Volume: 3,997,687
• 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: 3.98
• Enterprise Value/Revenue: 1.72
• Enterprise Value/Gross Profit: 3.06
• Enterprise Value/Ebitda: 7.13
• 1Y Price Target: $18.00
• Price Target Upside: 65.90% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

• Rating: 48 Neutral
• Price Target: $9.50 ▼(-12.44% Downside)

Organon's overall stock score is primarily impacted by its financial challenges, including declining revenue and high leverage. While the stock appears undervalued with a high dividend yield, technical indicators suggest caution. The company's strategic debt repayment and growth in certain segments provide some positive outlook, but significant operational challenges remain.

Positive Factors

Biosimilars Growth

Strong growth in the biosimilars segment, particularly with Hadlima, indicates robust demand and a competitive edge in offering cost-effective alternatives, which can drive long-term revenue growth.

Debt Repayment Strategy

Strategic debt repayment reduces financial leverage, improving balance sheet health and financial flexibility, which is crucial for sustainable growth and risk management.

Women's Health Growth

Growth in the Women's Health segment, especially in fertility solutions, highlights strong market demand and positions Organon well in a key strategic area, supporting long-term revenue stability.

Negative Factors

Revenue Decline

A decline in revenue, particularly due to loss of exclusivity in key markets, poses a challenge to maintaining growth and profitability, impacting long-term financial performance.

High Leverage

High leverage limits financial flexibility and increases risk, potentially hindering investment in growth opportunities and affecting long-term stability.

Cash Flow Decline

Declining cash flow generation reduces the company's ability to fund operations and invest in growth, posing a risk to financial health and operational sustainability.

Organon Business Overview & Revenue Model

Company Description

Organon (OGN) is a global healthcare company focused on women's health and other critical health issues. Established as a standalone entity from Merck & Co., Organon specializes in developing and delivering innovative medicines and solutions that address the unique health needs of women throughout their life stages. The company offers a diverse portfolio of products, including contraceptives, hormone replacement therapies, and treatments for conditions such as infertility, endometriosis, and osteoporosis.

How the Company Makes Money

Organon generates revenue primarily through the sale of its pharmaceutical products, which are designed to address various health issues particularly affecting women. Key revenue streams include sales from hormonal contraceptives, menopause therapies, and specialty medications for women's health conditions. Additionally, the company may engage in collaborations and partnerships with other pharmaceutical firms or healthcare organizations to co-develop products, which can also contribute to its earnings. By focusing on a niche market with specific health needs, Organon aims to build a loyal customer base that drives consistent revenue growth.

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: Positive
• Last Price: 10.85
• 50DMA: Positive
• 100DMA: Positive
• 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 Positive. The current price of 10.85 is above the 20-day moving average (MA) of 9.92, above the 50-day MA of 9.69, and below the 200-day MA of 12.07, indicating a neutral trend. The MACD of 0.32 indicates Negative momentum. The RSI at 67.27 is Neutral, neither overbought nor oversold. The STOCH value of 72.82 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for OGN.

Organon Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GSK	78 Outperform	80.30B	18.58	18.84%	4.09%	3.46%	-13.29%
MRK	75 Outperform	202.67B	12.51	33.49%	3.97%	2.00%	20.01%
SNY	72 Outperform	114.06B	11.68	7.17%	4.64%	-9.32%	120.62%
BMY	68 Neutral	93.94B	18.62	28.96%	5.39%	2.57%	0.00%
GRFS	61 Neutral	8.52B	20.33	2.67%	1.45%	10.05%	98.22%
OGN	48 Neutral	$2.72B	3.88	159.64%	5.53%	-1.02%	-30.57%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%

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.