Is Bristol Myers Squibb Undervalued?
Bristol-Myers Squibb (NYSE: BMY) has significantly underperformed the broader market, with its stock falling 20% this year while the S&P 500 index has increased by 14%. This decline is partly due to recent setbacks in the company’s drug pipeline, including disappointing late-stage results for its cardiovascular drug, Camzyos, and its schizophrenia drug, Cobenfy.
Despite these challenges, the key question is whether BMY’s 20% stock drop presents a buying opportunity. We believe it does, and that the stock is attractive at its current price of $45. Our conclusion is based on an analysis of BMY’s current valuation in comparison to its recent operating performance and historical financial health. We assessed Bristol-Myers Squibb across key parameters: Growth, Profitability, Financial Stability, and Downturn Resilience. While the company’s operational and financial condition is moderate, its current low valuation makes the stock particularly appealing, as detailed in the following analysis.
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How Does Bristol Myers Squibb’s Valuation Look vs. The S&P 500?
Going by what you pay per dollar of sales or profit, BMY stock looks cheap compared to the broader market.
- Bristol Myers Squibb has a price-to-sales (P/S) ratio of 1.9 vs. a figure of 3.3 for the S&P 500
- Additionally, the company’s price-to-free cash flow (P/FCF) ratio is 7.0 compared to 21.1 for S&P 500
- And, it has a price-to-earnings (P/E) ratio of 16.9 vs. the benchmark’s 24.0
How Have Bristol Myers Squibb’s Revenues Grown Over Recent Years?
Bristol Myers Squibb’s Revenues have seen inconsistent growth over recent years.
- Bristol-Myers Squibb has seen its top line grow at an average rate of 0.5% over the last 3 years (vs. increase of 5.3% for S&P 500)
- Its revenues have grown 4.6% from $46 Bil to $48 Bil in the last 12 months (vs. growth of 5.1% for S&P 500)
- Also, its quarterly revenues fell 5.6% to $11 Bil in the most recent quarter from $12 Bil a year ago (vs. 6.1% improvement for S&P 500)
How Profitable Is Bristol-Myers Squibb?
Bristol-Myers Squibb’s profit margins are higher than most companies in the Trefis coverage universe.
- Bristol-Myers Squibb’s Operating Income over the last four quarters was $7.9 Bil, which represents a moderate Operating Margin of 16.5% (vs. 18.6% for S&P 500)
- Bristol-Myers Squibb’s Operating Cash Flow (OCF) over this period was $14 Bil, pointing to a considerably high OCF Margin of 30.0% (vs. 20.3% for S&P 500)
- For the last four-quarter period, Bristol-Myers Squibb’s Net Income was $5.4 Bil – indicating a moderate Net Income Margin of 11.4% (vs. 12.7% for S&P 500)
Does Bristol-Myers Squibb Look Financially Stable?
Bristol-Myers Squibb’s balance sheet looks strong.
- Bristol-Myers Squibb’s Debt figure was $51 Bil at the end of the most recent quarter, while its market capitalization is $92 Bil (as of 9/21/2025). This implies a moderate Debt-to-Equity Ratio of 55.8%(vs. 21.0% for S&P 500). [Note: A low Debt-to-Equity Ratio is desirable]
- Cash (including cash equivalents) makes up $12 Bil of the $92 Bil in Total Assets for Bristol-Myers Squibb. This yields a strong Cash-to-Assets Ratio of 12.7% (vs. 7.0% for S&P 500)
How Resilient Is BMY Stock During A Downturn?
BMY stock has seen an impact that was slightly worse than the benchmark S&P 500 index during some of the recent downturns. Worried about the impact of a market crash on BMY stock? Our dashboard – BMY Lost 6.7% In A Month. Do You Buy Or Wait? – has a detailed analysis of how the stock performed during and after previous market crashes.
Inflation Shock (2022)
- BMY stock fell 40.2% from a high of $81.13 on 2 December 2022 to $48.48 on 21 November 2023, vs. a peak-to-trough decline of 25.4% for the S&P 500
- The stock is yet to recover to its pre-Crisis high
- The highest the stock has reached since then is 63.11 on 10 March 2025 and currently trades at around $45
COVID-19 Pandemic (2020)
- BMY stock fell 31.2% from a high of $67.43 on 21 January 2020 to $46.40 on 23 March 2020, vs. a peak-to-trough decline of 33.9% for the S&P 500
- The stock fully recovered to its pre-Crisis peak by 12 July 2021
Global Financial Crisis (2008)
- BMY stock fell 46.3% from a high of $32.14 on 17 July 2007 to $17.26 on 16 October 2008, vs. a peak-to-trough decline of 56.8% for the S&P 500
- The stock fully recovered to its pre-Crisis peak by 5 October 2011
Putting All The Pieces Together: What It Means For BMY Stock
In summary, Bristol-Myers Squibb’s performance across the parameters detailed above are as follows:
- Growth: Inconsistent
- Profitability: Strong
- Financial Stability: Strong
- Downturn Resilience: Moderate
- Overall: Moderate
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The Bottom Line
Overall, Bristol-Myers Squibb has a moderate performance across key parameters, but its current valuation appears low. The stock is trading at just 1.9 times trailing revenues, significantly below its five-year average of 2.9 times. This is also lower than some of its peers, with Merck at 3.2 times and Johnson & Johnson at 4.7 times trailing revenues. See – Bristol Myers Squibb’s valuation compared to its peers. Given this attractive valuation, we believe BMY is a good investment.
However, we could be wrong in our assessment, and investors may be hesitant to pay a higher multiple due to recent pipeline setbacks. Despite this, we believe these concerns are already priced into the stock. The company has a solid pipeline, and its recent acquisitions could provide significant upside. For instance, the company acquired 2seventy Bio earlier this year to gain full control of their jointly developed CAR-T cell therapy – Abecma – for multiple myeloma. In addition, Bristol-Myers Squibb is co-developing an antibody with BioNTech to target small-cell lung cancer. This promising drug has shown favorable results in mid-stage clinical trials and has a potential peak sales value exceeding $5 billion. In our view, the potential of these new developments outweighs the current pipeline disappointments, making the stock’s low valuation particularly attractive.
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