QS Research · Michael Burry's Scion Capital analyst template · 2006
AMGEN INC (AMGN)
As of 2026-11-08 · 13/15 boxes filled from SEC filings and market data
Conclusion: WATCH
Conviction low · base case none · downside -28% · upside +18%
On TTM to Sep 30 2026, AMGN has $17.09B EBITDA, $43.22B net debt and 540.91M shares. At today's 17.1x EV/EBITDA, EV is $292.26B, equity $249.05B and value about $460/share, or 0% versus $460.42. The section 13 downside at 13x EV/EBITDA gives $222.2B EV, $179.0B equity and about $331/share (-28%); the upside at ABBV's 19.7x gives $336.7B EV, $293.5B equity and about $543/share (+18%). That is not a deep-value long: the base is flat and downside is worse than -25%, while the short rule fails because base is not -30% and upside exceeds +25%. The market is already paying for the guidance raise and pipeline news; I would watch until the multiple or the earnings base gives a better risk/reward.
Key numbers
- Share price: $460.42
- Market cap: $249.05B
- Latest financial period: TTM to Sep 30, 2026
- Revenue (TTM): $38.90B
- EV / EBITDA (TTM): 17.1x
- P/E (TTM): 26.5x
- Price / book: 17.35x
The 15 boxes
- ✓ 1. Long-form business notes
On the figures supplied, Amgen is a product-sales biopharma whose revenue rose every year of the six-year XBRL series, from $25.42B in FY2020 to $36.75B in FY2025, with FY2025 operating income of $9.08B and operating cash flow of $9.96B. Reported product sales are net of heavy gross-to-net deductions — accrued sales deductions were $10.6B at Dec 31, 2025 — so the top line is a net figure, not a gross one. The change between the FY2020 10-K and the FY2025 10-K is dominated by the Horizon acquisition (closed October 6, 2023): amortization of intangibles lifted from $2.80B (FY2020) to $4.30B (FY2025), capex tripled to $1.86B, and share buybacks went to zero while diluted shares fell from 590M to 542M. The supplied excerpts do not contain Item 1's segment/product/channel narrative, and contain no FY2026 or TTM figures.
- ✓ 2. Competitive advantage
Amgen's defensible position is scale and portfolio breadth, not product-level exclusivity: revenue grew from $25.42B (FY2020) to $36.75B (FY2025) but operating income went nowhere ($9.14B to $9.08B), so the computed operating margin fell from about 36% to about 25%. Its own 10-K documents a list of principal products already facing biosimilar or generic competition (Prolia/XGEVA RANKL patents expired Feb 2025 U.S., Nov 2025 Europe; Sensipar lost significant share quickly to generics) and names the specific rivals on each franchise. Cash generation is the durable piece — operating cash flow of $8.47B to $11.49B every year FY2020-FY2025 against capex of $0.61B to $1.86B — while pricing power is being squeezed by CMS Medicare price setting on ENBREL (Jan 1, 2026) and Otezla (Jan 2027).
- ✓ 3. 10-Q takeaways
The Q3 2026 10-Q (quarter ended 2026-09-30, filed 2026-11-04) shows total revenues of $10,365 million, up 8%, with product sales of $9,883 million also up 8% on volume; nine-month revenues were $29,037 million, up 8%. GAAP operating income rose 47% to $3,710 million and GAAP operating margin 9.9 points to 37.5%, but much of that jump is the absence of the $400 million Q3 2025 Otezla impairment and lower acquisition-related amortization, while non-GAAP operating margin was essentially flat at 47.3%. Growth is concentrated in Repatha, EVENITY, TEZSPIRE, UPLIZNA, IMDELLTRA/IMDYLLTRA and BLINCYTO, against rapid biosimilar erosion in Prolia (-45%) and XGEVA (-47%); free cash flow was $3.7 billion versus $4.2 billion, no shares were repurchased, and the 10-Q outlook for the rest of 2026 is qualitative only.
- ✓ 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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