In the fast-paced and highly competitive business world of today, conducting thorough company analysis is essential for investors and industry observers. In this article, we will conduct an extensive industry comparison, evaluating AbbVie ABBV in relation to its major competitors in the Biotechnology industry. Through a detailed examination of key financial metrics, market standing, and growth prospects, our objective is to provide valuable insights and illuminate 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 | 65.64 | 30.51 | 5.83 | 6.94% | $3.85 | $8.6 | -5.42% |
| Amgen Inc | 22.48 | 24.15 | 5.36 | 11.05% | $3.05 | $5.08 | 19.84% |
| Vertex Pharmaceuticals Inc | 29.95 | 6.11 | 10.98 | 5.68% | $1.22 | $2.15 | 9.34% |
| Regeneron Pharmaceuticals Inc | 27.64 | 4.06 | 8.33 | 4.56% | $1.28 | $2.92 | 0.58% |
| Gilead Sciences Inc | 16.13 | 3.96 | 3.37 | 6.33% | $2.59 | $5.02 | -3.72% |
| Biogen Inc | 27.19 | 2.13 | 3.21 | 1.71% | $0.5 | $1.77 | -6.2% |
| BioNTech SE | 22.36 | 1.01 | 5.44 | 2.28% | $0.46 | $1.3 | -65.43% |
| Genmab A/S | 31.18 | 4.25 | 8.24 | 2.04% | $0.93 | $4.55 | -8.94% |
| Biomarin Pharmaceutical Inc | 99.45 | 3.30 | 6.85 | 0.41% | $0.05 | $0.51 | 20.22% |
| Neurocrine Biosciences Inc | 56.78 | 6.25 | 7.51 | 6.98% | $0.2 | $0.51 | 25.05% |
| Incyte Corp | 21.69 | 2.49 | 3.51 | 3.97% | $0.29 | $0.94 | 9.35% |
| United Therapeutics Corp | 12.33 | 1.92 | 5.22 | 3.71% | $0.32 | $0.54 | 25.07% |
| Roivant Sciences Ltd | 1.89 | 1.32 | 64.89 | 144.81% | $5.11 | $0.03 | 117.8% |
| Exelixis Inc | 36.46 | 3.17 | 4.16 | 3.71% | $0.09 | $0.46 | 13.15% |
| Average | 31.19 | 4.93 | 10.54 | 15.17% | $1.24 | $1.98 | 12.01% |
After a detailed analysis of AbbVie, the following trends become apparent:
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Notably, the current Price to Earnings ratio for this stock, 65.64, is 2.1x above the industry norm, reflecting a higher valuation relative to the industry.
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The elevated Price to Book ratio of 30.51 relative to the industry average by 6.19x suggests company might be overvalued based on its book value.
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With a relatively low Price to Sales ratio of 5.83, which is 0.55x the industry average, the stock might be considered undervalued based on sales performance.
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The company has a lower Return on Equity (ROE) of 6.94%, which is 8.23% below the industry average. This indicates potential inefficiency in utilizing equity to generate profits, which could be attributed to various factors.
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The company has higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $3.85 Billion, which is 3.1x above the industry average, indicating stronger profitability and robust cash flow generation.
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With higher gross profit of $8.6 Billion, which indicates 4.34x 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 -5.42% is significantly lower compared to the industry average of 12.01%. This indicates a potential fall in the company's sales performance.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio is a key indicator of a company's financial health and its reliance on debt financing.
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.
In terms of the Debt-to-Equity ratio, AbbVie can be assessed by comparing it to its top 4 peers, resulting in the following observations:
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In terms of the debt-to-equity ratio, AbbVie is positioned in the middle among its top 4 peers.
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This suggests a relatively balanced financial structure, where the company maintains a moderate level of debt while also utilizing equity financing with a debt-to-equity ratio of 5.73.
Key Takeaways
For AbbVie in the Biotechnology industry, the PE, PB, and PS ratios indicate high valuation compared to peers, suggesting potential overvaluation. In contrast, the low ROE and revenue growth, along with high EBITDA and gross profit, may raise concerns about the company's operational efficiency and future growth prospects relative to industry 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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