AMGN
AMGEN INCNasdaqValuation snapshot
Above base casePrice is between the base and bull cases.
Price captured with valuation · Valuation Sep 5, 2026
What drives AMGN's base case?
base-case thesisAmgen's newer medicines are growing fast enough to absorb much of the decline in older products. Growth slows from the recent pace as biosimilar competition intensifies, but the portfolio remains broad and volume-led. Scale and fading acquisition charges support profits, while sustained research and factory spending fund the next generation of medicines.
What shapes the assumptions
Six key growth medicines produced nearly 0.70 of Q2 product sales and grew 0.26
Growth-driver sales mix
Raises revenue growth
Prolia and XGEVA Q2 sales fell 0.32 and 0.34
RANKL-franchise sales growth
Lowers revenue growth
Q1 and Q2 reported profitability was about 0.31 and 0.35 of revenue
Quarterly operating profitability
Informs operating margin
First-half research expense increased 0.11
Research and development expense
Raises reinvestment
Each driver links a business metric to the forecast assumption it shapes — the basis for this case, not investment advice.
Why the gap?
The market is pricing this as if revenue grows 9.4% a year. Over the last 5 years it grew 9.8% a year, so the price assumes about what it has delivered.
What else could explain it?›
- Or, holding growth steady
- the price is also consistent with a 39.8% operating margin, against the 33.0% assumed here.
- How confident is this estimate?
- Robustness 49.0/10 (Moderate) — some of any gap is our own uncertainty rather than disagreement.
- What would change the answer?
- Which assumption this valuation swings on, and by how much.
Many combinations of assumptions reproduce the same price. These are ways to read what the market might be expecting, not the market's actual view. How this is worked out
Research & assumptions
Inspect the valuation thesis, cases, risks, evidence, and model inputs.
View details
Research & assumptions
Inspect the valuation thesis, cases, risks, evidence, and model inputs.
Three independently researched cases generated automatically from published financials. Every assumption is justified and cited; the discount rate is computed from researched market inputs.
Company value drivers
Ranked operating metrics and the valuation assumptions they influence.
1. Quarterly revenue growth
Year-over-year growth in total quarterly revenue shows whether new products are replacing losses from mature medicines.
9.5%
derived2. Quarterly GAAP operating profit share
Operating income divided by quarterly revenue measures how much reported profit Amgen retains before interest and tax.
35.0%
derived3. Prolia and XGEVA quarterly sales
Combined quarterly sales of the patent-expired RANKL franchise measure the size and speed of a major revenue replacement burden.
$1.1B
derived5. Quarterly research spending share
Research expense divided by quarterly revenue tracks the investment needed to replenish the medicine portfolio and its near-term pressure on profit.
18.6%
derivedBase inputs from financials
source period →Base revenue (TTM)
$38.1B
Diluted shares
544,000,000
Net cash
-$43.3B
Bear
low confidence$165.20
IV / share
-62.2% vs $437.23
- Explicit cash flows
- $54.47
- Terminal value
- $190.35
- Net cash
- -$79.62
- Intrinsic value / share
- $165.20
115.2% of the value rests on the terminal value — high dependency. A small change to terminal growth moves the valuation a lot — see terminal growth below.
Revenue growth3.0% → 1.0% → -1.0% → 0.0% → 1.0%medium
How derived: Starting from 0.08 first-half revenue growth and management's 2026 revenue range, this path assumes accelerating Prolia, XGEVA, Otezla and ENBREL erosion overwhelms much of the growth from newer medicines.
Why this confidence: Reported product-level erosion ↑, Five-year pipeline uncertainty ↓
Measured by
- Quarterly revenue growth9.5%derived
- Prolia and XGEVA quarterly sales$1.1Bderived
- Growth-driver share of product sales70.0%reported
Evidence for
- Prolia and XGEVA sales fell 0.32 and 0.34 year over year in the second quarter, and Amgen expects accelerated erosion as multiple biosimilars compete.[Amgen Q2 2026 Form 10-Q]· primary
Evidence against
- Second-quarter product sales still grew 0.09, with Repatha, EVENITY, TEZSPIRE, UPLIZNA and IMDELLTRA among the volume-growth drivers.[Amgen Q2 2026 Form 10-Q]· primary
Operating margin30.0%medium
How derived: Starting from reported margins of about 0.31 in Q1 and 0.35 in Q2, the case assumes price pressure, adverse product mix and continued late-stage research spending pull normalized profitability toward 0.30.
Why this confidence: Two recent reported margins ↑, Acquisition-amortization and litigation volatility ↓
Measured by
- Quarterly GAAP operating profit share35.0%derived
- Prolia and XGEVA quarterly sales$1.1Bderived
- Quarterly research spending share18.6%derived
Evidence for
- Amgen reported lower selling prices in the first half and identified higher profit-sharing, manufacturing, research and commercial expenses as cost pressures.[Amgen Q2 2026 Form 10-Q]· primary
Evidence against
- Second-quarter operating income was $3.514 billion on $10.054 billion of revenue, a reported margin near 0.35.[Amgen Q2 2026 Form 10-Q]· primary
Tax rate17.0%medium
How derived: Starting from management's 2026 GAAP tax-rate guidance of 0.145 to 0.16, this case moves above the range as favorable geographic and acquisition-related effects diminish.
Why this confidence: Current-year management guidance ↑, Future tax and earnings-mix uncertainty ↓
No tracked driver measures this assumption yet.
Evidence for
- The first-half 2026 effective tax rate rose to 0.136 from 0.107, partly because of changes in earnings mix.[Amgen Q2 2026 Form 10-Q]· primary
Evidence against
- Management's full-year 2026 GAAP tax-rate guidance is only 0.145 to 0.16.[Amgen Q2 2026 results]· primary
Reinvestment rate28.0%low
How derived: Starting from first-half capital expenditure equal to roughly 0.23 of after-tax operating profit before working-capital and acquisition needs, this case assumes weaker research productivity and manufacturing expansion require 0.28 of operating profit to be reinvested.
Why this confidence: Reported capital expenditure ↑, Research is expensed rather than capitalized ↓, Future acquisitions are unpredictable ↓
Measured by
- Quarterly research spending share18.6%derived
Evidence for
- First-half capital expenditure increased to $1.225 billion from $0.780 billion, while Amgen also increased spending on later-stage clinical programs.[Amgen Q2 2026 Form 10-Q]· primary
Evidence against
- First-half operating cash flow was $6.191 billion despite the higher investment level, showing that existing products still generate substantial internally funded cash.[Amgen Q2 2026 Form 10-Q]· primary
Terminal growth1.0%low
How derived: Starting from the company's diversified medicine portfolio but substantial patent and pricing exposure, this case assumes long-run growth below broad nominal economic growth.
Why this confidence: Documented patent and pricing risks ↑, Perpetual forecast horizon ↓
Measured by
- Quarterly revenue growth9.5%derived
- Growth-driver share of product sales70.0%reported
- Quarterly research spending share18.6%derived
Evidence for
- Major products face recurring patent loss, biosimilar competition and government price-setting pressure, including current erosion in Prolia, XGEVA and Otezla.[Amgen Q2 2026 Form 10-Q]· primary
Evidence against
- Seventeen products were annualizing above $1 billion in sales during Q2 2026, reducing dependence on any single medicine.[Amgen Q2 2026 results]· primary
Base
low confidence$348.53
IV / share
-20.3% vs $437.23
- Explicit cash flows
- $74.41
- Terminal value
- $353.74
- Net cash
- -$79.62
- Intrinsic value / share
- $348.53
101.5% of the value rests on the terminal value — high dependency. A small change to terminal growth moves the valuation a lot — see terminal growth below.
Revenue growth6.0% → 5.5% → 5.0% → 4.5% → 4.0%medium
How derived: Starting from management's 2026 revenue midpoint of $38.8 billion and first-half growth of 0.08, the path assumes growth medicines broadly offset mature-product erosion while total growth gradually normalizes.
Why this confidence: Management's current-year revenue guidance ↑, Broad product-level disclosure ↑, Pipeline outcomes beyond 2026 ↓
Measured by
- Quarterly revenue growth9.5%derived
- Prolia and XGEVA quarterly sales$1.1Bderived
- Growth-driver share of product sales70.0%reported
Price implies: 9.4% vs our 5.0% — one of several sets that fit this price
Evidence for
- Total revenue grew 0.10 in Q2, while six key growth drivers grew 0.26 and produced nearly 0.70 of product sales.[Amgen Q2 2026 results]· primary
Evidence against
- First-quarter product sales grew only 0.04 because lower selling prices and inventory partly offset 0.09 volume growth.[Amgen Q1 2026 results]· primary
Operating margin33.0%medium
How derived: Starting from reported margins near 0.31 in Q1 and 0.35 in Q2, the assumption uses 0.33 as a through-cycle level that balances lower acquisition amortization and scale against higher research and profit-sharing costs.
Why this confidence: Recent quarterly margin range ↑, Changing product mix ↓
Measured by
- Quarterly GAAP operating profit share35.0%derived
- Prolia and XGEVA quarterly sales$1.1Bderived
- Quarterly research spending share18.6%derived
Price implies: 39.8% vs our 33.0% — one of several sets that fit this price
Evidence for
- Q2 operating expenses were almost unchanged while revenue rose 0.10, lifting reported operating income by 0.32.[Amgen Q2 2026 Form 10-Q]· primary
Evidence against
- First-half research spending increased 0.11, principally because of later-stage programs including MariTide.[Amgen Q2 2026 Form 10-Q]· primary
Tax rate15.5%high
How derived: The assumption uses the upper half of management's 0.145 to 0.16 GAAP guidance range because the first-half rate is rising as acquisition amortization declines.
Why this confidence: Narrow management guidance range ↑, Geographic earnings-mix variability ↓
No tracked driver measures this assumption yet.
Evidence for
- Management guided to a 2026 GAAP tax rate between 0.145 and 0.16.[Amgen Q2 2026 results]· primary
Evidence against
- The reported first-half effective tax rate was lower at 0.136, showing that quarterly earnings mix can produce a rate below guidance.[Amgen Q2 2026 Form 10-Q]· primary
Reinvestment rate22.0%low
How derived: Starting from first-half capital expenditure of $1.225 billion and rising later-stage research spending, the model reinvests 0.22 of after-tax operating profit to sustain mid-single-digit growth.
Why this confidence: Reported capital and research spending ↑, Accounting treatment of research ↓, Working-capital volatility ↓
Measured by
- Quarterly research spending share18.6%derived
Evidence for
- First-half capital expenditure represented about 0.066 of revenue and research expense represented 0.192 of revenue.[Amgen Q2 2026 Form 10-Q]· primary
Evidence against
- Capital expenditure alone does not capture Amgen's economically important research investment, which is expensed as incurred.[Amgen Q2 2026 Form 10-Q]· primary
Terminal growth2.0%low
How derived: Starting from Amgen's broad portfolio, global reach and recurring need for biologic therapies, the assumption allows modest perpetual growth while remaining below the current nominal Treasury yield and recognizing continuous patent replacement.
Why this confidence: Diversified marketed portfolio ↑, Perpetual pipeline-replacement uncertainty ↓
Measured by
- Quarterly revenue growth9.5%derived
- Growth-driver share of product sales70.0%reported
- Quarterly research spending share18.6%derived
Evidence for
- Amgen generated product sales across numerous therapeutic franchises, with no product exceeding 0.13 of 2025 product sales.[Amgen 2025 annual report]· primary
Evidence against
- Amgen warns that patent expiration, biosimilars, price regulation and payer discounts can materially reduce product sales.[Amgen 2025 Form 10-K]· primary
Bull
low confidence$514.16
IV / share
+17.6% vs $437.23
- Explicit cash flows
- $89.69
- Terminal value
- $504.09
- Net cash
- -$79.62
- Intrinsic value / share
- $514.16
98.0% of the value rests on the terminal value — high dependency. A small change to terminal growth moves the valuation a lot — see terminal growth below.
Revenue growth8.5% → 8.0% → 7.5% → 6.5% → 5.5%low
How derived: Starting from Q2 revenue growth near 0.10 and 0.26 growth from the six key growth drivers, this path assumes newer medicines, expanded indications and late-stage launches more than replace mature-product losses.
Why this confidence: Multiple reported high-growth products ↑, Dependence on clinical and regulatory success ↓, Growth rate remains above management's current-year midpoint ↓
Measured by
- Quarterly revenue growth9.5%derived
- Prolia and XGEVA quarterly sales$1.1Bderived
- Growth-driver share of product sales70.0%reported
Evidence for
- Q2 sales increased 0.37 for Repatha, 0.38 for EVENITY, 0.42 for TEZSPIRE and more than doubled for both UPLIZNA and IMDELLTRA.[Amgen Q2 2026 Form 10-Q]· primary
Evidence against
- Q2 sales declined 0.32 for Prolia, 0.34 for XGEVA, 0.21 for Otezla and 0.17 for KYPROLIS.[Amgen Q2 2026 Form 10-Q]· primary
Operating margin35.0%medium
How derived: Starting from the Q2 reported margin near 0.35, the case assumes high-volume growth products, scale and declining acquisition amortization offset rising research and launch costs.
Why this confidence: Q2 margin already reached the target ↑, Future launch and research costs ↓
Measured by
- Quarterly GAAP operating profit share35.0%derived
- Prolia and XGEVA quarterly sales$1.1Bderived
- Quarterly research spending share18.6%derived
Evidence for
- Q2 operating income rose 0.32 as operating expenses remained nearly unchanged and revenue grew 0.10.[Amgen Q2 2026 Form 10-Q]· primary
Evidence against
- Amgen increased first-half research spending 0.11 and said it expects continued growth in later-stage program spending.[Amgen Q2 2026 Form 10-Q]· primary
Tax rate14.5%medium
How derived: The assumption uses the low end of management's 2026 GAAP tax-rate guidance, consistent with a favorable geographic earnings mix persisting.
Why this confidence: Management guidance directly supports the value ↑, Long-term geographic mix may change ↓
No tracked driver measures this assumption yet.
Evidence for
- The low end of Amgen's 2026 GAAP tax-rate guidance is 0.145.[Amgen Q2 2026 results]· primary
Evidence against
- The Q2 effective tax rate was 0.142 and management's guided range extends to 0.16, leaving limited support for rates materially below this assumption.[Amgen Q2 2026 Form 10-Q]· primary
Reinvestment rate18.0%low
How derived: Starting from strong first-half cash generation alongside $1.225 billion of capital expenditure, this case assumes successful launches earn high returns so only 0.18 of after-tax operating profit is needed to support faster growth.
Why this confidence: Strong reported operating cash flow ↑, Assumed high return on future research ↓
Measured by
- Quarterly research spending share18.6%derived
Evidence for
- Amgen generated $6.191 billion of operating cash flow in the first half while several newer products grew at double-digit rates.[Amgen Q2 2026 Form 10-Q]· primary
Evidence against
- Capital expenditure increased 0.57 year over year in the first half, and later-stage research spending is also rising.[Amgen Q2 2026 Form 10-Q]· primary
Terminal growth2.5%low
How derived: Starting from Amgen's diversified global portfolio and management's expectation of growth into the next decade, the case assumes durable innovation sustains long-run growth near broad inflation without exceeding the economy indefinitely.
Why this confidence: Broad growth-product portfolio ↑, Very long forecast horizon ↓, Biotechnology development risk ↓
Measured by
- Quarterly revenue growth9.5%derived
- Growth-driver share of product sales70.0%reported
- Quarterly research spending share18.6%derived
Evidence for
- Management reported that six key growth drivers generated nearly 0.70 of Q2 product sales and expressed confidence in growth into the next decade.[Amgen Q2 2026 results]· primary
Evidence against
- The company operates in a market where every successful medicine ultimately faces patent expiry, regulated pricing and competing therapies.[Amgen 2025 Form 10-K]· primary
Valuation robustness
reliability of the estimate, not a stock rating49 / 100 · Moderate
Formula v1.0.0. Higher means a more reliable estimate — not a recommendation.
Quality checks
Automated model-risk flags — warnings, not recommendations.
- 101% of the intrinsic value rests on the terminal value — a small change to terminal growth moves the valuation a lot.→ terminal growth
- The reinvestment assumption is low-confidence.→ reinvestment
- The terminal growth assumption is low-confidence.→ terminal growth
Per-share economics
Business growth after changes in the diluted share count.
| Period | Revenue growth | FCF/share | FCF/share growth | Shares | Share growth |
|---|---|---|---|---|---|
| Q3 2024 | 23.2% | 6.11 | 31.0% | 542M | 0.7% |
| Q1 2025 | 9.4% | 1.81 | 111.5% | 541M | 0.9% |
| Q2 2025 | 9.4% | 3.53 | -14.0% | 541M | 0.0% |
| Q3 2025 | 12.4% | 7.84 | 28.2% | 542M | 0.0% |
| Q1 2026 | 5.8% | 2.72 | 49.9% | 544M | 0.6% |
| Q2 2026 | 9.5% | 6.41 | 81.6% | 544M | 0.6% |
Valuation history every run
History builds as the valuation is recalculated — this is the first recorded run.
Market inputs researched
The latest available U.S. Treasury daily par-yield table reports a 10-year nominal yield of 0.0478.
The January 2026 country-risk dataset reports a 0.0446 implied equity risk premium for the United States.
The market input uses AMGN's latest completed regular-session closing price on 2026-09-04.
Generated 9/5/2026, 9:51:06 PM · pipeline v1.2.0