AbbVie Inc. (ABBV) Stock Analysis
AbbVie Inc.
▾ What's in the 58/100 risk score? (higher = riskier)
Contributions (weight × component score) sum to the total. This near-term score now includes fundamental health (leverage, FCF trend, DCF applicability). See the Financial Health section for the full balance-sheet read.
How to read ABBV
A profitable, cash-generating business — our discounted-cash-flow estimate is the primary lens, cross-checked against what growth the price implies and against peers.
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1
The verdict + intrinsic value (our DCF) ↓
Our estimate of what a share is worth, versus today's price.
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2
Reverse-DCF + the interactive calculator ↓
See the growth the price assumes, then flex every assumption yourself to pressure-test it.
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3
Football field + peers ↓
A cross-check across methods and against comparable companies.
Is now a good time to buy ABBV?
Macro: Neutral / mid-cycle
ABBV trades at $249.46 vs an estimated
intrinsic value
of $229.05
— a +8.9% premium to model IV.
Today's price is consistent with ABBV's owner-earnings free cash flow per share growing about 6.0% per year over the next 5 years (the
price-implied growth rate).
Our DCF projects
modeled growth
of 4.5% per year based on history + sector defaults
(analyst consensus estimates not yet integrated).
Note: this is a 5-year, per-share view. The Reverse-DCF section below asks the same question on a stricter 10-year free-cash-flowFree Cash Flow (FCF) — Operating cash flow minus capital spending: cash left after a company covers operating costs, taxes and interest and reinvests in the business — but BEFORE repaying debt principal or paying dividends. The cash actually available to investors.
Why it matters: A company can show big profits on paper while burning through cash. FCF is what actually fills the bank account.
Reference: Healthy mature businesses convert 8–15% of revenue into FCF · Growth companies often negative
Full explanation → basis — so its growth number is different, not contradictory.
▾ Exactly how this 5-year figure is computed
Current price: $249.46 (live)
Discount rate: 8.0%; terminal growth: 3.0%
Forecast: 5 years explicit growth, then a linear fade to terminal; end-of-period cash flows discounted to today
Growth path: the model's probability-weighted scenarios (conservative 40% / base 35% / optimistic 25%) — see the "Three Scenarios, Weighted" table below for the three IVs
Method: solve for the constant 5-year per-share growth rate that, run through this same structure, makes the intrinsic value equal today's price. (The 10-year figure below uses a flat 10-yr path instead — hence a different number.)
Not investment advice. The model can be wrong. Verify the assumptions in the sections below and consider consulting a licensed advisor for significant decisions.
What growth must the market believe? Reverse DCF — Instead of asking "what is this stock worth?", asks "what growth rate is the current market price already assuming?"
Why it matters: It crystallizes the bull thesis as a single number you can argue with. If the market expects 40% growth for 10 years and you do not believe that, the stock is overvalued.
Reference: 10–15% = sustainable for strong companies · 20–25% = exceptional · 30%+ = historically very rare
Traditional DCF asks "what is this stock worth?" Reverse DCF flips it: it treats today's price as correct and solves for the growth rate that justifies it. In plain terms — if our model is right about everything else, the company's cash flow would have to grow (or shrink) by this much every year for the next 10 years for today's price to make sense. If that required growth looks unrealistic, the price is stretched; if it looks easy to beat, the price may be cheap.
Why it matters: A company can show big profits on paper while burning through cash. FCF is what actually fills the bank account.
Reference: Healthy mature businesses convert 8–15% of revenue into FCF · Growth companies often negative
Full explanation → must grow at:
▾ Exactly how this 10-year figure is computed
Forecast length: 10 years, single flat growth rate (no fade)
Terminal growth after year 10: 3.0%
Discount rate: 8.0% (the rate the model used)
Price used: $249.46 — the live price shown on this page (not frozen)
Method: solve for the constant annual growth rate that makes the discounted 10-year FCF stream + terminal value equal today's price.
Almost any healthy business should clear this bar. Likely undervalued unless something serious is wrong.
For reference: Reasonable — sustainable for a quality business over time.
▾ How we computed this · Reality check thresholds · Assumptions
- Starting FCF/share: $10.36 (trailing 3-year average)
- Discount RateDiscount Rate — The annual return you demand for taking single-stock risk instead of buying a safe Treasury or index fund.
Why it matters: Higher discount rate = stricter valuation (a stock has to produce more cash to be worth holding). Lower = more generous.
Reference: 8–12% is standard · 9–10% matches S&P 500 historical return · Below 7% is illogical for single-stock risk
Full explanation →: 8.0% — standard 8-12%; 9-10% matches S&P 500 historical return - Terminal Growth RateTerminal Growth Rate — The growth rate we assume the company holds forever, after the explicit 10-year forecast period ends.
Why it matters: It anchors the long-tail value. Cannot mathematically exceed long-term GDP growth or the company eventually becomes larger than the global economy.
Reference: 2–3% (matches long-term US GDP growth) · Above 4% is mathematically problematic
Full explanation →: 3.0% — matches long-term GDP growth - Forecast horizon: 10 years explicit + terminal perpetuity
| ≤ 0% | Priced for decline — likely undervalued OR dying business |
| 5-12% | Reasonable; sustainable for quality businesses |
| 12-18% | Demanding — strong execution required |
| 18-25% | Exceptional — few companies sustain for a decade |
| 25-35% | Heroic — historically very rare |
| 35%+ | Borderline impossible at scale |
Sustaining 30%+ cash-flow growth for a full decade at scale is exceedingly rare — the bar is brutally high.
Use the interactive calculator below to change the discount rate, growth and terminal-growth assumptions and watch the value move.
Football field: where does the price sit?
Different valuation methods produce different fair-value ranges depending on assumptions. Plotting them together lets you see at a glance whether the current price is reasonable across approaches, or only one specific lens.
Industry multiples sourced from: industry: Pharmaceuticals. See the Peer Basket section below for the peer comparison and its limited-comparables caveat.
Quality & solvency checks
Cheap stocks can be cheap for a reason. These screens warn when a low valuation comes paired with structural fragility.
Why it matters: Cheap-looking stocks (low P/E or P/B) often have low Z-scores because the market knows the company is dying. Z-score warns you before you fall into a value trap.
Reference: > 3.0 = safe zone · 1.81–3.0 = grey zone · < 1.81 = distress zone
Full explanation →
The Z-score needs working capital, retained earnings, EBIT, sales and total assets from the latest balance sheet, and at least one of those isn't reported in machine-readable form here — common for foreign private issuers. We leave it blank rather than compute a distress verdict from an estimated input. It doesn't affect the reported figures in the financial tables below.
▾ The checks — what passed, what didn't (and what we couldn't measure)
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✓ Positive net incomeNet income $4,226.0M in the latest year.
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✓ Positive operating cash flowOperating cash flow $19,030.0M (was $18,806.0M the prior year).
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✓ Cash flow backs up reported profitOperating cash flow $19,030.0M vs net income $4,226.0M.
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✗ Return on assets improvingReturn on assets 3.2% vs 3.2% a year ago.Why this matters: Is the company squeezing more profit out of each dollar of assets than last year? Rising = getting more efficient; falling = the opposite.
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✓ Debt load (vs assets)Long-term debt is 43.6% of assets vs 44.4% a year ago ($58,447.0M now).
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✓ Short-term liquidity (current ratio)Current ratio 0.67x vs 0.66x a year ago — below 1.0, a caution flag.
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✓ Share count (dilution)Share count held roughly flat (1,773.0M → 1,773.0M year-over-year).
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· Pricing power (gross margin) (n/a — data not reported; not scored)
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✓ Sales per asset (asset turnover)Asset turnover 0.46x vs 0.42x a year ago.
Missing data is never counted as a pass or a fail — it's shown as n/a and excluded from the denominator. Each check compares the company against its own prior year.
What if you assume different inputs?
Here's where we land — and what happens if you change the assumptions. Drag the sliders to set your own Discount RateDiscount Rate — The annual return you demand for taking single-stock risk instead of buying a safe Treasury or index fund.
Why it matters: Higher discount rate = stricter valuation (a stock has to produce more cash to be worth holding). Lower = more generous.
Reference: 8–12% is standard · 9–10% matches S&P 500 historical return · Below 7% is illogical for single-stock risk
Full explanation → (the annual return you demand for single-stock risk) and terminal growth; the value updates live so you can see whether the stock looks cheaper or richer. The discount rate starts at 8.0%, the figure our model used for ABBV. Open Advanced to also change beta, growth and the rate path.
Note: at default inputs this calculator mirrors the headline model's three-scenario weighting (conservative/base/optimistic, 40/35/25), so its opening value should land close to the headline intrinsic value of $229.05. A small gap is rounding; a large one would be a data problem — and we check for it below.
7.0% — beta-based (CAPM), from this stock's BetaBeta — How much the stock moves when the overall market moves. 1.0 = moves with the market; 1.5 = moves 50% more than the market.
Why it matters: Higher beta = more volatile = should demand higher discount rate. Low beta stocks (utilities, consumer staples) move less.
Reference: Most stocks 0.5–1.5 · Defensives ~0.3 · High-vol tech ~1.5–2.0
Full explanation → of 0.45. The safe Treasury rate plus a premium scaled by how much more (or less) volatile the stock is than the market.
8.0% — sector/quality tier. A simpler hurdle set by industry and business durability: lower for stable, wide-moat companies; higher for speculative or micro-caps.
The headline value and this calculator start at 8.0% — the more conservative sector/quality rate (we use the more conservative sector/quality rate when model applicability is limited or the balance sheet is stretched). Drag the slider to the other rate to see the full range.
+8.9%
At the default assumptions the flat path lands near our published value of $229.05. Move any slider to recompute it with your own.
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⚙ Advanced — tinker with every input (beta, growth, rate path, margin → full intrinsic value)
AbbVie Inc. appears fairly valued, with the price 8.9% ABOVE intrinsic valueIntrinsic Value — Our DCF model's estimate of what each share is mathematically worth based on projected cash flows.
Why it matters: Compare to current price. Below IV = potentially undervalued. Above IV = priced for growth that must actually happen.
Reference: Model-derived; quality depends on data and assumptions.
Full explanation → (a 8.9% premium). The market is paying up for AbbVie's consistent profitability and positive operating cash flow, despite a low current ratio. The biggest risk to our model's base assumptions is that the current ratio of 0.67 indicates potential liquidity challenges, which could impact future cash flow generation if not addressed.
As of yesterday
Anatomy of a share
What you're buying per share. Bars are at the same scale so you can see the relative size of revenue, costs, cash flow, and debt — not just read them in a table.
What's free cash flow / what do these mean?
Revenue per share — how much the business earns from customers, divided by the number of shares outstanding. Top of the income statement.
Earnings per share — profit left after operating costs, interest, and taxes, per share. Two versions appear on this page and are not interchangeable: GAAP diluted EPS uses the company's weighted-average diluted share count during the reporting period (this is the "earnings" in "price-to-earnings"); net income per current share divides annual net income by today's share count. They differ whenever the share count has changed.
Owner-earnings free cash flow per share — the cash the business produces for shareholders. Savng's owner-earnings FCF subtracts capital expenditures and stock-based compensation from operating cash flow (SBC is a real dilution cost even though it's non-cash). This is deliberately more conservative than "standard" FCF, which subtracts only capital expenditures — so our figure is lower than the headline FCF you'll see elsewhere. FCF funds dividends, buybacks, debt repayment, and acquisitions; a company can report positive earnings yet negative FCF.
Debt per share — total interest-bearing borrowings divided by shares. High debt-per-share next to thin FCF-per-share is a fragility signal.
What you actually need to decide
Every stock price is a disagreement. Here's the single thing that must go right for the bulls, the single thing that breaks the thesis, and the concrete signposts to watch so you can update your view as real results arrive.
- Growth rates of new immunology and oncology drugs
- Trends in the current ratio in upcoming quarters
- Updates on the company's R&D pipeline success
The trend, in plain numbers (2024 → 2025)
Straight from the financial statements — no model, no opinion. For a small or unprofitable company, the direction of these numbers usually tells you more than any single valuation.
- Revenue grew +9% to $61.16B.
- Net income fell -1% to $4.23B.
Roughly flat: Free cash flow fell to $16.86B.
Management & Leadership
Richard A. Gonzalez has served as Chairman and CEO of AbbVie since its inception in 2013, following its spin-off from Abbott Laboratories. He has overseen the company's growth into a major biopharmaceutical player, particularly in immunology and oncology.
What They Make
AbbVie Inc. is a research-based biopharmaceutical company that develops and sells advanced therapies for complex and serious diseases. Its primary customers are healthcare providers, pharmacies, and government health programs who purchase its pharmaceutical products.
End Markets
Revenue Drivers
Why Is It Priced Like This?
Why Customers Pay
The market prices ABBV at a premium of +8.9% to intrinsic valueIntrinsic Value — Our DCF model's estimate of what each share is mathematically worth based on projected cash flows.
Why it matters: Compare to current price. Below IV = potentially undervalued. Above IV = priced for growth that must actually happen.
Reference: Model-derived; quality depends on data and assumptions.
Full explanation →, consistent with its positive net income and operating cash flow, which has been positive for 5/5 years. This suggests investors are optimistic about the company's ability to generate future cash flows, despite the current ratio being below 1 at 0.67, indicating potential short-term liquidity concerns.
Three Scenarios, Weighted
| Scenario | IV | vs Price | Weight |
|---|---|---|---|
| Conservative | $195.30 | -21.7% | 40% |
| Base | $233.03 | -6.6% | 35% |
| Optimistic | $277.48 | 11.2% | 25% |
| Weighted | $229.05 | -8.2% | 100% |
What has to be true (historical comparison)
To justify today's price, ABBV's owner-earnings cash flow must grow to roughly 1.3× its current level over 5 years. If profit margins and share count stay roughly constant, that is equivalent to about the same multiple of revenue. Each card below is a real company that grew revenue at a comparable magnitude — possibly in a different industry; the point is the growth magnitude required and its historical base rate, not that ABBV resembles these businesses. The green/amber line shows whether that company cleared or fell short of the bar, and the tag on the right shows how it actually fared afterward (succeeded, faded, or wiped out).
What 'scale' looked like in 1999 for comparison purposes. Big and profitable. Revenue actually declined over the next 20 years.
Picks-and-shovels for the internet. Real business, real profits, but priced at 200x earnings. Took 20+ years to make a new all-time high. Revenue grew only 4x in 20 years.
$6B revenue, modestly profitable. Two years before iPod. Best-known case of a stagnating business that pivoted into platforms and 250x'd.
Anchors are hand-curated 10-K snapshots. We surface the three whose 5-year revenue growth most-closely brackets the rate required to justify the current price. Source: SEC EDGAR.
Business Model & Valuation
How They Make Money
Free Cash Flow DCF High
Owner-earnings FCF DCF: positive free cash flow (operating cash flow − capex − stock-based comp) in a sector suited for cash-flow-based valuation.
▾ Exactly how the $10.36 normalized FCF/share is computed
2025: 16.9B
2024: 16.9B
2023: 21.3B
Sum ÷ 3 = 18.4B average total FCF
÷ 1,773.0M current diluted shares = $10.36/share
We divide the multi-year total-FCF average by today's share count (not each year's own share count), so the buyback effect is captured once, via the current denominator.
Show advanced inputs
| RevenueGrowth | 2.1% |
| EpsGrowth | -22.2% |
| HistoricalFcfGrowth | -5.7% |
| SectorDefault | 10.0% |
| SectorDefaultSource | Healthcare sector default |
| BestEstimate | 4.5% |
| Method | blend(70% revenue_cagr, 30% sector) |
| GrowthBasis | total |
What this model does NOT do: this is a consolidated owner-earnings FCF model. Standalone segment assumptions: none. It does not project its revenue segments independently; their combined effect is embedded in the historical revenue and cash-flow trend the model extrapolates. The calculator above can only approximate a segment's impact through the single consolidated growth rate — it cannot model any one line separately. For a true segment-level view, build a separate model from the company's segment disclosures.
Maturity & Competitive Position
Moat Signals
Revenue has been roughly flat, growing at 2.1% per year over the last four years, from $56197M to $61160M.
Geography & Markets
AbbVie is headquartered in the United States and has a significant global presence, with operations and sales across various international markets, including Europe and Asia. Specific geographic revenue mix percentages are not available from current data sources.
Geographic Risks
Market Signals
These are timing signals, not value signals — they describe the stock's recent price behavior, not what the business is worth. Use them for the "the thesis looks good, but is now the moment?" question. Each tile below explains what it's saying.
Why it matters: Short-term contrarian indicator. Extreme readings often precede mean reversion, though not always.
Reference: 30–70 normal · >70 overbought · <30 oversold
Full explanation → (14)51.0NeutralMomentum is balanced — neither overbought nor oversold.
Why it matters: When the fast line crosses above the slow line, short-term momentum is turning up; below, turning down. A timing cue, not a value signal.
Reference: Line above signal = bullish momentum · below = bearish
Full explanation →BearishLine below signalThe fast trend is below the slow trend — short-term momentum is currently downward.
Technicals describe price, not the business. A great company can have a "bearish" tape (a buying chance) and a weak one a "bullish" tape (a trap). Pair these with the valuation and health sections above.
QUALITY
Data Quality & Risk Flags (1 notes — click to expand/collapse)
Guardrail Notes (1)
- Latest FCF ($16.9B, net of stock-based compensation) is 4x net income ($4.2B) - using 3yr average FCF to reduce one-time inflation.
FINANCIALS
Financial Statements (5-year tables — click to expand)
From AbbVie Inc.'s SEC filings (EDGAR).
Income (5yr)
| Year | Revenue | Net Income | EPS |
|---|---|---|---|
| 2025 | 61.2B | 4.2B | $2.36 |
| 2024 | 56.3B | 4.3B | $2.39 |
| 2023 | 54.3B | 4.9B | $2.72 |
| 2022 | 58.1B | 11.8B | $6.63 |
| 2021 | 56.2B | 11.5B | $6.45 |
Cash Flow (5yr)
| Year | Operating CF | CapEx | − SBC | Free Cash Flow |
|---|---|---|---|---|
| 2025 | 19.0B | 1.2B | 955.0M | 16.9B |
| 2024 | 18.8B | 974.0M | 911.0M | 16.9B |
| 2023 | 22.8B | 777.0M | 747.0M | 21.3B |
| 2022 | 24.9B | 695.0M | 671.0M | 23.6B |
| 2021 | 22.8B | 787.0M | 692.0M | 21.3B |
How we define FCF: operating cash flow − capital expenditure − stock-based compensation (owner-earnings basis — SBC is a real cost to shareholders even though it's non-cash). Latest year: 19.0B − 1.2B − 955.0M (stock-based comp) = 16.9B. This is the same owner-earnings FCF definition the valuation model uses, though the DCF's starting value is a trailing 3-year average, not this single year.
Balance Sheet
| Total Assets | 134.0B |
| Total Liabilities | — |
| Equity | -3.3B |
| Total Debt | 64.5B |