Buffett Brain · Research note
Score updated 21 Oct 2026 · analysis from 2 Jun 2026
AZN· Healthcare
AstraZeneca
AstraZeneca is a fine pharmaceutical business selling at a rich price, with a 79.7% gross margin but only a 4.1% owner-earnings yield.
Buffett fit
Partial fit
Owner
50
Durability
73
Management
75
Price
29
Score updated 21 Oct 2026 · analysis from 2 Jun 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 I owned all of AstraZeneca I would be pleased with the product economics and uneasy with the price tag.
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The durability score of 73 is fair. Patents and regulatory approval keep rivals out for a time, and a 79.7% proves the protection is real while it lasts.
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Management earns a 75 here, and I respect parts of the record. covers reported earnings at 1.15 times, so the profits are real cash and not accounting fiction.
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There is almost no at this price, which is why the valuation score is just 29.
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For and against
The strongest points on each side, with the numbers behind them.
In its favor
6- 1Outstanding product economics with a 79.7% , showing patients and payers accept the prices.
- 2Healthy 23.5% that survives heavy research spending.
- 3Strong top-line momentum, with revenue about 11.9% a year.
- 4Earnings are backed by cash, with at 1.15 times net income.
Concerns
6- 1Valuation is steep: a 4.1% owner-earnings yield and a 27.4 ratio leave no room for error.
- 2Returns on capital are only ordinary, 12.9% trailing and just 7.4% over five years.
- 3Earnings have plunged as much as 40% in a single past stretch, exposing patent-cliff risk.
- 4The share count has risen about 2.3% a year, quietly diluting owners.
Price history
$169+36.4%· 5-year return
Weekly closing prices. Touch or hover the line for a date.
The business
How the business works
AstraZeneca discovers, patents and sells prescription medicines across oncology, cardiovascular, respiratory and rare disease. The economics are excellent while patents hold, with a 79.7% and a 23.5% , and revenue near 11.9% a year. The trouble is that every dollar of those earnings rests on patents that eventually expire, so the company must keep inventing to stand still.
How this analysis has moved
The call has held across 5 reviews.
Sep 27, 2026 → Oct 21, 2026
What other investors would say
The same company, judged by three other documented playbooks.
Keep researching
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