AbbVie Inc. (ABBV) — Fundamental Analysis & Key Financial Ratios

Kaplio's reading: AbbVie Inc.

Updated on October 31, 2026 · accounts published on October 30, 2026

Reading of October 30, 2026: A high-margin drugmaker with strong cash generation

AbbVie trades at a P/E of 83.1 over the last 12 months, 232 % above its ten-year median of 25.0, after the stock rose 31 % in a year.

• Is AbbVie expensive or cheap? At a P/E of 83.1, AbbVie trades 173 % above its sector median and higher than 92 % of the past decade.
• How is the business doing? Revenue grew 8.6 % over the last 12 months, but EPS slipped 0.8 % and net margin is only 9.8 % against a 29 % operating margin.
• How strong is the balance sheet? Net debt was 3.6× EBITDA in fiscal 2025, above the 2.5× healthy ceiling for healthcare, while the dividend has risen 11 years running.
• What to expect from the next earnings? Analysts expect EPS of $3.91 for the quarter due February 3, 2027; AbbVie beat estimates in 7 of the last 8 quarters.
• Does AbbVie invest enough in R&D and turn profit into cash? Free cash flow was 422 % of net income in fiscal 2025, while R&D at 14.9 % of revenue sits just under the 15 % healthy mark.

Is AbbVie expensive or cheap?

Over the last 12 months AbbVie has earned little relative to its share price. Its P/E of 83.1 compares with a ten-year median of 25.0 and a median of 30.4 across 246 healthcare companies. The stock has traded at a lower P/E 92 % of the time in the last decade, and today it is not far from the decade high of 97.7. Cash flow gives a milder picture: the free cash flow yield is 4.5 % against an earnings yield of 1.0 %, and EV/EBITDA stands at 27.7×. After a 31 % gain in 12 months, the shares sit within 1 % of their 52-week high of $294.89.

How is the business doing?

Sales are growing: revenue rose 8.6 % over the last 12 months, but EPS fell 0.8 %. The gap between a 29 % operating margin and a 9.8 % net margin shows how little of operating profit reaches shareholders. The operating margin sits close to its 2014-2025 average of 28 % and below the 33 % of fiscal 2025. Returns on capital hold up better. ROIC of 13.5 % over the last 12 months is 7.9 points above the sector median of 5.6 %, and it has stayed above 10 % in 7 of the last 10 fiscal years, with a low of 8.7 % in 2020.

How strong is the balance sheet?

Net debt stood at $37.47 per share in fiscal 2025 ($40.42 of debt less $2.95 of cash). That equals 13 % of the current share price and 3.6× EBITDA, well past the 2.5× that counts as healthy in healthcare. Short-term liquidity is tight, with a current ratio of 0.81, and the Altman Z of 2.4 sits in the grey zone. A Piotroski score of 7 out of 9 points to solid recent fundamentals. Shareholders get a 2.3 % yield and 11 consecutive annual dividend increases through fiscal 2025. The payout reached 276 % of earnings that year, though, so the dividend relies on cash flow rather than accounting profit.

What to expect from the next earnings?

On October 30, 2026, AbbVie reported EPS of $3.82, 2.4 % above the $3.73 analysts expected. That makes 7 beats in the last 8 quarters. The next report, due February 3, 2027, carries an EPS estimate of $3.91. Full-year expectations have edged down: the 2026 EPS consensus fell 0.9 % in the last 30 days, from $14.04 to $13.91 among 16 analysts, while the revenue consensus barely moved. Analysts remain positive, with 32 of 44 rating the stock a buy, 11 a hold and 1 a sell.

Does AbbVie invest enough in R&D and turn profit into cash?

In healthcare the R&D pipeline is the invisible asset. When patents expire, the revenue they protect disappears, so investors watch innovation and cash flow more closely than reported earnings. AbbVie spent 14.9 % of revenue on R&D in fiscal 2025, just under the 15 % considered healthy. Cash conversion is the strong point: free cash flow was 422 % of net income, against a 90 % bar. The 70.2 % gross margin barely clears the 70 % mark for branded pharma. The weak spot is EPS, which shrank 3.0 % a year over fiscal 2020-2025, far below the 8 % the sector treats as healthy.

How this was prepared: the data comes from companies' official filings, collected by a professional provider, and from Kaplio's analysis engine (trailing-12-month ratios, 10 years of history and sector medians computed across US-listed companies). The text is written from that data alone, every figure is checked against it before publication, and it is reviewed when the company reports results. This is not investment advice.