In today's fast-paced and highly competitive business world, it is crucial for investors and industry followers to conduct comprehensive company evaluations. In this article, we will delve into an extensive industry comparison, evaluating AbbVie ABBV in relation to its major competitors in the Biotechnology industry. By closely examining key financial metrics, market standing, and growth prospects, our objective is to provide valuable insights and highlight company's performance in the industry.
AbbVie Background
AbbVie is a pharmaceutical firm with a strong exposure to immunology (with Humira, Skyrizi, and Rinvoq) and oncology (with Imbruvica and Venclexta). The company was spun off from Abbott in early 2013. The 2020 acquisition of Allergan added several new products and drugs in aesthetics (including Botox).
| Company | P/E | P/B | P/S | ROE | EBITDA (in billions) | Gross Profit (in billions) | Revenue Growth |
|---|---|---|---|---|---|---|---|
| AbbVie Inc | 50.73 | 37.59 | 5.55 | 14.8% | $4.49 | $8.22 | 0.7% |
| Amgen Inc | 43.53 | 32.55 | 5.55 | -2.01% | $2.15 | $4.25 | 21.98% |
| Vertex Pharmaceuticals Inc | 31.37 | 6.73 | 12.37 | 6.09% | $1.34 | $2.35 | 13.3% |
| Regeneron Pharmaceuticals Inc | 29.60 | 4.09 | 8.72 | 2.73% | $0.83 | $2.71 | -0.54% |
| Gilead Sciences Inc | 181.25 | 4.63 | 2.98 | -20.66% | $-3.54 | $5.13 | 5.26% |
| Biogen Inc | 28.25 | 2.16 | 3.41 | 2.62% | $0.68 | $1.75 | -7.0% |
| BioNTech SE | 192.94 | 1.09 | 8.03 | -1.57% | $-0.29 | $0.13 | -85.31% |
| Genmab A/S | 23.04 | 3.78 | 7.08 | 4.13% | $1.72 | $3.96 | 46.19% |
| Biomarin Pharmaceutical Inc | 78.25 | 3.10 | 6.47 | 1.77% | $0.14 | $0.52 | 8.79% |
| Neurocrine Biosciences Inc | 36.63 | 5.69 | 6.98 | 1.88% | $0.04 | $0.51 | 22.57% |
| Incyte Corp | 18 | 2.48 | 3.57 | 3.2% | $0.26 | $0.82 | 8.93% |
| United Therapeutics Corp | 13.03 | 2.29 | 5.48 | 5.42% | $0.43 | $0.6 | 33.7% |
| Sarepta Therapeutics Inc | 285.33 | 12.07 | 8.32 | 3.97% | $0.05 | $0.36 | 63.1% |
| Roivant Sciences Ltd | 2.02 | 1.31 | 70.46 | -2.51% | $-0.18 | $0.02 | 5.68% |
| Average | 74.1 | 6.31 | 11.49 | 0.39% | $0.28 | $1.78 | 10.51% |
When analyzing AbbVie, the following trends become evident:
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A Price to Earnings ratio of 50.73 significantly below the industry average by 0.68x suggests undervaluation. This can make the stock appealing for those seeking growth.
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It could be trading at a premium in relation to its book value, as indicated by its Price to Book ratio of 37.59 which exceeds the industry average by 5.96x.
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With a relatively low Price to Sales ratio of 5.55, which is 0.48x the industry average, the stock might be considered undervalued based on sales performance.
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The company has a higher Return on Equity (ROE) of 14.8%, which is 14.41% above the industry average. This suggests efficient use of equity to generate profits and demonstrates profitability and growth potential.
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The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $4.49 Billion is 16.04x above the industry average, highlighting stronger profitability and robust cash flow generation.
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With higher gross profit of $8.22 Billion, which indicates 4.62x above the industry average, the company demonstrates stronger profitability and higher earnings from its core operations.
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The company's revenue growth of 0.7% is significantly below the industry average of 10.51%. This suggests a potential struggle in generating increased sales volume.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio gauges the extent to which a company has financed its operations through debt relative to equity.
Considering the debt-to-equity ratio in industry comparisons allows for a concise evaluation of a company's financial health and risk profile, aiding in informed decision-making.
When assessing AbbVie against its top 4 peers using the Debt-to-Equity ratio, the following comparisons can be made:
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AbbVie falls in the middle of the list when considering the debt-to-equity ratio.
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This indicates that the company has a moderate level of debt relative to its equity with a debt-to-equity ratio of 9.24, suggesting a balanced financial structure with a reasonable debt-equitymix.
Key Takeaways
The low P/E and P/S ratios of AbbVie suggest that the company's stock price is relatively undervalued compared to its peers in the Biotechnology industry. However, the high P/B ratio indicates that investors are willing to pay a premium for AbbVie's book value. On the other hand, AbbVie's high ROE, EBITDA, and gross profit margins reflect strong profitability and operational efficiency, outperforming industry peers. The low revenue growth rate may indicate a potential area for improvement compared to competitors.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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