QS Research · Michael Burry's Scion Capital analyst template · 2006
AbbVie Inc. (ABBV)
As of 2026-11-06 · 12/15 boxes filled from SEC filings and market data
Conclusion: PASS
Conviction medium · base case +3% · downside -37% · upside +35%
At $290.41 (N1) AbbVie trades at 25.8x EV/EBITDA (N26) and a 3.7% FCF yield (N29) — the middle of the profitable large-cap peer band (AMGN 17.1x, PFE 21.5x, JNJ 26.4x, LLY 33.9x), so the market is not missing the Skyrizi/Rinvoq rotation, it is pricing it. Holding the one base that section 13 set (TTM to Sep 30, 2026: EBITDA $22.01B, EV $567.53B, market cap $513.33B, 1,767.62M shares — N13, N24, N9, N5) and applying the peer band: 26.4x x $22.01B = $581.1B EV, less the $54.20B EV-to-market-cap gap = $526.9B equity = $298/share (+3%); 17.1x gives $376.4B EV, $322.2B equity = $182/share (-37%); 33.9x gives $746.1B EV, $691.9B equity = $391/share (+35%). The bad news that would normally make a name cheap is already printed and offsetting: Humira -31.2% to $683M and Imbruvica -26.1% to $522M against Skyrizi +22.7% to $5.776B and Rinvoq +23.9% to $2.706B in Q3 2026, with $18.87B of TTM FCF (N17) servicing $54.20B of net debt and negative equity of -$4.58B (N23). So: no long (base +3% fails the +30% test), no short (base is not -30% and the upside is +35%), a fair-value pass on today's earnings with no normalization and no margin of safety; the FCF cross-check agrees — 4.5% yield = $419.3B = $237/share (-18%), 3.0% yield = $629.0B = $356/share (+23%).
Key numbers
- Share price: $290.41
- Market cap: $513.33B
- Latest financial period: TTM to Sep 30, 2026
- Revenue (TTM): $66.01B
- EV / EBITDA (TTM): 25.8x
- P/E (TTM): 49.8x
The 15 boxes
- ✓ 1. Long-form business notes
AbbVie is a single-segment, research-based biopharmaceutical company (Delaware, incorporated April 10, 2012; spun out of Abbott on January 1, 2013) that earns money by discovering, manufacturing and commercializing branded medicines and aesthetics products across immunology, neuroscience, oncology, aesthetics, eye care and other categories, sold mostly through three U.S. wholesalers and national payer systems abroad. Revenue ran from $45.80B in FY2020 to $61.16B in FY2025, with a dip to $54.32B in FY2023; FY2025 operating income was $15.07B against net income of $4.19B and operating cash flow of $19.03B on capex of $1.21B. The business changed materially between the FY2020 and FY2025 annual reports: the May 8, 2020 Allergan acquisition added aesthetics, neuroscience and eye care; Humira, at roughly 43% of FY2020 net revenues, has been replaced as the patent story by Skyrizi and Rinvoq, whose U.S. composition-of-matter patents run to 2033 and, for Rinvoq tablets, no generic entry is expected before April 2037. Because this is a secular name, the notes below use the current-year (FY2025) figures rather than any multi-year average.
- ✓ 2. Competitive advantage
Competitive advantage is real but narrow: patents, regulatory exclusivity and biologic manufacturing scale protect branded products, yet the FY2025 10-K calls the markets highly competitive and Humira already faces direct biosimilar competition globally. The franchise is concentrated: Skyrizi and Rinvoq were each >10% of total net revenues and ~42% combined in 2025. FY2025 XBRL shows $61.16B revenue, $15.07B operating income, $19.03B operating cash flow and $1.21B capex; operating income has been volatile ($18.12B FY2022, $9.14B FY2024, $15.07B FY2025). Pricing power is constrained by IRA government price setting and PBM/formulary control.
- ✓ 3. 10-Q takeaways
Q3 2026 (quarter ended 2026-09-30) net revenues were $17.404 billion, up 10.3% reported and 10.5% at constant currency, on Skyrizi $5.776 billion (+22.7%) and Rinvoq $2.706 billion (+23.9%) more than offsetting Humira -31.2% and Imbruvica -26.1%. Gross margin jumped to 75% from 66% (helped by an $847 million intangible impairment in the prior-year quarter, not by operating leverage alone), SG&A and R&D held flat at 23% and 15% of revenue, and acquired IPR&D fell to $216 million from $2.680 billion. Nine-month operating cash flow was $14.871 billion versus $13.812 billion, funding $1.1 billion of buybacks and $9.2 billion of dividends, with the quarterly dividend raised to $1.82 from $1.73. The main new risk item, Medicare negotiation of Botox, was set aside by a district court on 2026-10-29, subject to appeal.
- ✓ 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
- ○ 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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