Merck KGaA
Merck KGaA Fundamental Analysis
Merck KGaA (MRK.DE) shows weak financial fundamentals with a PE ratio of 18.30, profit margin of 12.36%, and ROE of 9.02%. The company generates $21.1B in annual revenue with weak year-over-year growth of 0.78%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 49.4/100 based on profitability, valuation, growth, and balance sheet metrics. The D grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze MRK.DE's fundamental strength across five key dimensions:
Efficiency Score
WeakMRK.DE struggles to generate sufficient returns from assets.
Valuation Score
ExcellentMRK.DE trades at attractive valuation levels.
Growth Score
WeakMRK.DE faces weak or negative growth trends.
Financial Health Score
ExcellentMRK.DE maintains a strong and stable balance sheet.
Profitability Score
WeakMRK.DE struggles to sustain strong margins.
Key Financial Metrics
Is MRK.DE Expensive or Cheap?
P/E Ratio
MRK.DE trades at 18.30 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, MRK.DE's PEG of -1.55 indicates potential undervaluation.
Price to Book
The market values Merck KGaA at 1.67 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 5.88 times EBITDA. This is generally considered low.
How Well Does MRK.DE Make Money?
Net Profit Margin
For every $100 in sales, Merck KGaA keeps $12.36 as profit after all expenses.
Operating Margin
Core operations generate 20.15 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $9.02 in profit for every $100 of shareholder equity.
ROA
Merck KGaA generates $5.01 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Merck KGaA produces operating cash flow of $3.93B, showing steady but balanced cash generation.
Free Cash Flow
Merck KGaA produces free cash flow of $2.08B, offering steady but limited capital for shareholder returns and expansion.
FCF Per Share
Each share generates $4.79 in free cash annually.
FCF Yield
MRK.DE converts 4.37% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
18.30
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-1.55
vs 25 benchmark
P/B Ratio
Price to book value ratio
1.67
vs 25 benchmark
P/S Ratio
Price to sales ratio
2.26
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.42
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.46
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.09
vs 25 benchmark
ROA
Return on assets percentage
0.05
vs 25 benchmark
ROCE
Return on capital employed
0.10
vs 25 benchmark
How MRK.DE Stacks Against Its Sector Peers
| Metric | MRK.DE Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 18.30 | 28.54 | Better (Cheaper) |
| ROE | 9.02% | 738.00% | Weak |
| Net Margin | 12.36% | -43982.00% (disorted) | Strong |
| Debt/Equity | 0.42 | 0.34 | Weak (High Leverage) |
| Current Ratio | 1.46 | 2806.01 | Neutral |
| ROA | 5.01% | -14624.00% (disorted) | Weak |
MRK.DE outperforms its industry in 2 out of 6 key metrics, particularly excelling in Net Margin, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Merck KGaA's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
30.98%
Industry Style: Defensive, Growth, Innovation
High GrowthEPS CAGR
110.38%
Industry Style: Defensive, Growth, Innovation
High GrowthFCF CAGR
60.57%
Industry Style: Defensive, Growth, Innovation
High Growth