JNJJNJ
US • HEALTHCARE
$253.97
P/E
29.38
PEG
4.89
FCF Yield
2.9%
Rev Growth YoY
+9.9% YoY
Gross Margin
68.0%
Health Score
8/10
D/E Ratio
0.59
Confidence
LOW
Business Snapshot
Johnson & Johnson is a diversified healthcare conglomerate operating primarily in the pharmaceutical (drug manufacturing) industry, with significant revenue also coming from medical devices and consumer health products. The company competes across multiple healthcare sub-sectors, holding a dominant, diversified position as one of the largest healthcare companies globally by revenue. As a large-cap company with a market cap of $613.02B and TTM revenue of $96.36B, it generates enormous financial scale and benefits from significant regulatory moats, patent protection on key drugs, and a wide economic moat built on brand trust and R&D investment.
Financial Health
Gross margin of 68.0% and net margin of 21.8% demonstrate strong pricing power and operational efficiency within the drug manufacturing industry. The balance sheet is healthy, with a debt/equity ratio of 0.59x reflecting conservative leverage, while a current ratio of 1.03x indicates adequate short-term liquidity but little excess buffer...
Risk Assessment
- VALUATION — P/E ratio of 29.38x is elevated versus the sector average of 22x, pricing in a premium that may not be justified given the earnings decline.
- EARNINGS QUALITY — Net income declined by 52.9% year-over-year despite 9.9% revenue growth, raising concerns about one-time charges or margin erosion.
- TECHNICALS — RSI, MACD, and moving average data unavailable for this period; momentum cannot be independently confirmed.
- INSIDER ACTIVITY — Insiders have net sold with 1 sell and 0 buys over the last 90 days, a cautious signal from those closest to the business.
- DIVERGENCE — Revenue growth is positive at 9.9% but earnings growth is deeply negative at -52.9%, creating a fundamental contradiction that limits conviction....
Gross margin of 68.0% and net margin of 21.8% demonstrate strong pricing power and operational efficiency within the drug manufacturing industry. The balance sheet is healthy, with a debt/equity ratio of 0.59x reflecting conservative leverage, while a current ratio of 1.03x indicates adequate short-term liquidity but little excess buffer. Free cash flow of $17.67B is massive in absolute terms, generating a modest FCF yield of 2.9% — the company is a cash-generating powerhouse, not a cash burner. Overall financial health is strong, supporting substantial dividend capacity, aggressive reinvestment in R&D, and the ability to weather economic downturns without needing to dilute shareholders.
- VALUATION — P/E ratio of 29.38x is elevated versus the sector average of 22x, pricing in a premium that may not be justified given the earnings decline. - EARNINGS QUALITY — Net income declined by 52.9% year-over-year despite 9.9% revenue growth, raising concerns about one-time charges or margin erosion. - TECHNICALS — RSI, MACD, and moving average data unavailable for this period; momentum cannot be independently confirmed. - INSIDER ACTIVITY — Insiders have net sold with 1 sell and 0 buys over the last 90 days, a cautious signal from those closest to the business. - DIVERGENCE — Revenue growth is positive at 9.9% but earnings growth is deeply negative at -52.9%, creating a fundamental contradiction that limits conviction.
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