Baxter International Inc. (BAX) — Fundamental Analysis & Key Financial Ratios

Kaplio's reading: Baxter International Inc.

Updated on October 4, 2026 · accounts published on July 30, 2026

Reading of October 4, 2026: A growing healthcare business that is losing money and carries heavy debt

Baxter International's operating margin is −2.4 % over the last 12 months, well below its 5.1 % average for fiscal 2014-2025.

• Is Baxter International expensive or cheap? Baxter International trades 15 % below its 52-week high of $28.35, with a 5.5 % free cash flow yield over the last 12 months.
• How is the business doing? Revenue grew 5.7 % over the last 12 months, but the operating margin is −2.4 %, against a 5.1 % average for fiscal 2014-2025.
• Does Baxter International invest enough in R&D and turn profit into cash? R&D was 4.6 % of revenue in fiscal 2025, less than a third of the 15 % considered healthy in healthcare.
• How strong is the balance sheet? Net debt was $16.23 per share in fiscal 2025, equal to 69 % of the share price and 10.5× EBITDA.
• What to expect from the next earnings? Analysts expect EPS of $0.52 on October 29, 2026, and the fiscal 2026 consensus of $2.05 has held steady for 18 days.

Is Baxter International expensive or cheap?

Over the last 12 months, Baxter International trades at an EV/EBITDA of 26.2× and a P/B of 2.0×. The EV/EBITDA looks high mainly because EBITDA is depressed and net debt is large, so the multiple reflects weak earnings more than market optimism. The free cash flow yield of 5.5 % over the last 12 months is the kinder figure, because the business still generates cash while it reports losses. The stock is up 6 % over the past year and sits 15 % below its 52-week high of $28.35, well above the $15.80 low. That suggests the market has already priced in part of a recovery.

How is the business doing?

Baxter International is selling more and earning less. Revenue rose 5.7 % over the last 12 months while EPS fell 38 %. The operating margin of −2.4 % compares with a 5.1 % average across fiscal 2014-2025. Fiscal 2025 closed at −2.7 %, so the small improvement since then does not yet amount to a turnaround. A net margin of −9.3 % and an ROE of −17 % show that the losses reach shareholders. ROIC stands at −1.6 % over the last 12 months, 8.1 points below the 6.5 % median of 190 sector peers, and it has topped 10 % in only 2 of the last 10 fiscal years.

Does Baxter International 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 research spending, gross margin and return on capital ahead of headline earnings. Baxter International fails all three tests. R&D took 4.6 % of revenue in fiscal 2025, against a healthy level of 15 %. The gross margin was 30.1 % in fiscal 2025, far below the 70 % typical of branded pharma, which leaves little room to fund research. ROIC of −1.6 % over the last 12 months is well short of the 12 % bar. Cash is the better side: the 5.5 % free cash flow yield shows the business still produces cash.

How strong is the balance sheet?

Debt is the main weakness. Net debt of $16.23 per share in fiscal 2025 equals 69 % of the current share price. At 10.5× EBITDA, it is more than four times the 2.5× that counts as healthy in healthcare. Debt to equity of 1.56 over the last 12 months points the same way. Short-term liquidity holds up, with a current ratio of 1.95. However, the Altman Z of 2.1 sits in the grey zone and the Piotroski score is just 3 of 9, so both signal fragile finances. The 0.2 % dividend yield returns very little cash to shareholders.

What to expect from the next earnings?

Baxter International reports on October 29, 2026, and analysts expect EPS of $0.52 for the quarter. The fiscal 2026 EPS consensus of $2.05 from 8 analysts has barely changed over the last 18 days, and the revenue estimate is just as stable. The track record favors the company: it beat EPS estimates in 6 of the last 8 quarters. On July 30, 2026, it reported $0.56 against $0.37 expected, a 53 % surprise and the largest of the last 8 quarters. Beyond the headline EPS, the operating margin trend will show whether profitability is recovering.

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.