What’s Happening With Amgen Stock?

Amgen (NASDAQ: AMGN) recently released its Q4 results, with revenues and earnings exceeding the street estimates. It reported sales of $9.1 billion and adjusted earnings of $5.31, compared to the consensus estimates of $8.9 billion and $5.08, respectively. The top-line reflected an 11% y-o-y growth, as the company continued to benefit from market share gains for its relatively new drugs, including Repatha and Evenity. The acquisition of Horizon Therapeutics in Q4 2023 has bolstered the top-line growth for Amgen. Its biosimilar to AbbVie’s Humira — Amjevita —  has been faring well, with an 84% y-o-y rise in sales to $294 million in Q4.

Amgen’s adjusted operating margin contracted by 40 bps to 46.3% during the quarter. Its bottom line of $5.31 reflected a 13% y-o-y growth. Looking forward, Amgen expects its sales to be in the range of $34.3 billion and $35.7 billion, and its adjusted earnings to be in the range of $20.00 and $21.20 per share. This compares with the street estimates of $34.6 billion and $20.60, respectively.

Amgen stated that the U.S. FDA has put the clinical trials for its obesity treatment – AMG513 – on hold, while it remains on track for mid-stage clinical trials results for MariTide in the second half of the year. MariTide is an important experimental obesity treatment for Amgen. MartiTide could stand out despite rising competition in the weight-loss treatment market, given that it could help patients stop gaining weight even after they discontinue the treatment.

Looking at AMGN stock, at its current levels of around $310, it’s trading at 5x trailing revenues, aligning with the stock’s average P/S ratio over the last five years. Although AMGN seems to be fairly priced for now, any positive development for MariTide in clinical trials will likely result in investors assigning a higher valuation multiple for the stock.

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