Buffett Brain · Research note
Score updated 22 Oct 2026 · analysis from 22 Sept 2026
AMGN· Healthcare
Amgen
Amgen's robust drug portfolio and top-quintile operating margins are overshadowed by high leverage and stretched valuation.
Buffett fit
Partial fit
Owner
62
Durability
64
Management
65
Price
26
Score updated 22 Oct 2026 · analysis from 22 Sept 2026
Buffett's checklist
Each number against Buffett's bar, and where it ranks among Healthcare stocks in our database.
How much profit the business makes on each dollar invested in it. Higher is better.
What is left of each sale after the cost of making the product. A high number often means pricing power.
The cash the business earns for its owners, compared with the price of the whole company.
How fast sales grew each year over the last five years.
How many years of today's profit you pay for at today's price. Lower means cheaper.
How much the company owes compared with what it owns outright. Lower is safer.
The four pillars
How the business measures up on each of Buffett's four tests.
If we owned Amgen entirely, the next decade would focus on sustaining high (15.0% TTM) and managing debt levels (Net debt/EBITDA of 2.69).
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Amgen's durability is supported by its strong net margin (21.0%) and consistent profitability over five years.
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Management has kept the share count stable (CAGR 0.06%) and returned capital via a 2.91% dividend yield and 1.27% yield.
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With a of 28.4 and yield of 3.7%, the valuation is stretched.
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- What would change the call
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For and against
The strongest points on each side, with the numbers behind them.
In its favor
7- 1 of 24.7% is top-quintile in healthcare.
- 2 of 67.2% indicates strong .
- 3 of 15.0% is top-quintile in the sector.
- 4Stable share count with a 5-year CAGR of 0.06%.
Concerns
7- 1High debt/equity ratio of 6.31, indicating significant .
- 2Net debt/EBITDA of 2.69 exceeds Buffett's comfort level.
- 3Interest coverage of 4.3 is below the 5x threshold.
- 4 of 28.4 suggests overvaluation compared to earnings growth.
Price history
$438+109.5%· 5-year return
Weekly closing prices. Touch or hover the line for a date.
The business
How the business works
Amgen Inc. develops and markets therapeutics for various conditions, with key products like Enbrel and Prolia driving revenue. The company achieved $36.75B in revenue with a 24.7% , placing it in the top quintile for the healthcare sector. However, the business model's reliance on a few high-margin drugs poses risks if patent expirations or competition arise.
How this analysis has moved
The call has held across 5 reviews.
Sep 27, 2026 → Oct 22, 2026
What other investors would say
The same company, judged by three other documented playbooks.
Keep researching
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