QS Research · Michael Burry's Scion Capital analyst template · 2006
AbbVie Inc. (ABBV)
As of 2026-11-08 · 13/15 boxes filled from SEC filings and market data
Conclusion: PASS
Conviction low · base case none · downside -22% · upside +17%
The market is not mispricing AbbVie: at 19.7x TTM EV/EBITDA (N28), the base case of TTM EBITDA $28.90B (N14) gives EV $569.15B (N26), equity $514.92B (N9) and $291.31/share (N1), i.e. today's price. Downside: EBITDA -20% to $23.12B x 19.7 = $455.5B EV, less $54.22B net debt (N24) = $401.2B equity / 1,767.62M shares (N5) = $227/share, -22.1%. Upside: EBITDA +15% to $33.24B x 19.7 = $654.7B EV, less $54.22B = $600.5B equity / 1,767.62M shares = $340/share, +16.6%. Q3 2026 shows real growth (revenue +10.3%, Skyrizi +22.7%, Rinvoq +23.9%) but also Humira -31.2% and Imbruvica -26.1%, and at 50.0x TTM P/E (N31) the stock is not cheap. With base 0%, downside -22.1% and upside +16.6% all at the same multiple, neither the long nor short rule is met; this is a pass.
Key numbers
- Share price: $291.31
- Market cap: $514.92B
- Latest financial period: TTM to Sep 30, 2026
- Revenue (TTM): $66.01B
- EV / EBITDA (TTM): 19.7x
- P/E (TTM): 50.0x
The 15 boxes
- ✓ 1. Long-form business notes
ABBV reports one global biopharma segment selling immunology, neuroscience, oncology, aesthetics, eye-care and other products through wholesalers/distributors; FY2025 revenue was $61.16B, operating income $15.07B and operating cash flow $19.03B versus FY2020 $45.80B, $11.36B and $17.59B. The FY2020 report shows Humira at ~43% of total net revenues and records the May 2020 Allergan acquisition; the FY2025 report shows a broader product list and Humira facing global biosimilar competition. Sources give consolidated/product-list detail, not product-level revenue, price, cost or margin.
- ✓ 2. Competitive advantage
AbbVie's advantage is a patent-and-exclusivity protected, capital-light drug franchise: FY2025 revenue of $61.16B produced $19.03B of operating cash flow on just $1.21B of capex, and revenue never fell as much as 10% in any year from FY2020 to FY2025 despite Humira already facing global biosimilar competition. It is not a broad moat but a concentrated one: Skyrizi plus Rinvoq were about 42% of FY2025 total net revenues, and the 10-K itself says the company must keep launching new products to replace revenue lost to competitors. Competition is intense and named by therapeutic class, and the durability of pricing is being actively eroded by IRA government-set prices and new MFN/PBM pressure, so the advantage rests on patents and cash flow rather than on price or book value (total equity was -$3.27B at FY2025).
- ✓ 3. 10-Q takeaways
Q3 2026 net revenues were $17.404B, up 10.3% reported and 10.5% constant currency, with Skyrizi and Rinvoq growth offsetting Humira and Imbruvica declines; gross margin was 75% vs 66%, helped by Q3 2025 impairment charges. Nine-month 2026 operating cash flow was $14.9B and buybacks were $1.1B. The same-quarter earnings release gives FY2026 adjusted diluted EPS guidance of $13.76-$13.96 including $1,251M of acquired IPR&D and milestones expense. The computed risk-factor diff shows 11 paragraphs with no counterpart in the prior 10-K, including MFN/reference pricing, PBM, tariff and 340B topics.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ✓ 11. Impression of the shareholder letter
Filled; members read this box.
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
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