AbbVie Inc. (ABBV): investment thesis checklist
What a value investor writing down why they own AbbVie Inc. would be relying on, read from its filings: the figures that have carried the business, the lines a reader might set on them, and the published tests it meets today. A list to write against, not a view on the company.
1. The figures the case would rest on
- Return on invested capital: 16.1% in FY2025; between 16.1% and 63.9% over 5 filed years, median 19.1%. Does the thesis need it to stay inside that range?
- Return on equity: 128.7% in FY2024; between 35.3% and 128.7% over 7 filed years, median 74.9%. Does the thesis need it to stay inside that range?
- Free cash flow yield: 4.4% in FY2025; between 4.4% and 9.7% over 10 filed years, median 8.2%. Does the thesis need it to stay inside that range?
- EV to EBIT: 31.06x in FY2025; between 12.21x and 41.33x over 7 filed years, median 22.70x. Does the thesis need it to stay inside that range?
- Price to earnings: 96.82x in FY2025; between 16.77x and 96.82x over 10 filed years, median 27.25x. Does the thesis need it to stay inside that range?
- Gross margin: 70.2% in FY2025; between 62.4% and 77.6% over 10 filed years, median 70.1%. Does the thesis need it to stay inside that range?
- Operating margin: 24.6% in FY2025; between 16.2% and 39.0% over 10 filed years, median 28.0%. Does the thesis need it to stay inside that range?
- Net debt to EBITDA: 3.99x in FY2025; between 2.02x and 6.54x over 7 filed years, median 3.62x. Does the thesis need it to stay inside that range?
- Revenue growth, 5-year CAGR: 6.0% in FY2025; between 6.0% and 17.0% over 10 filed years, median 10.9%. Does the thesis need it to stay inside that range?
- Share count change: 0.0% in FY2025; between -4.0% and 12.7% over 10 filed years, median -0.1%. Does the thesis need it to stay inside that range?
2. What must stay true: guardrails a reader might set
Each line is drafted from AbbVie Inc.'s own current figure, never from a level we think a business should clear, and replayed over its filed years. They are a reader's to keep, edit or drop.
Revenue Growth 1Y stays at or above 0%
Today 8.57%. Replayed over 9 filed years, it would have broken in 1; most recently FY2023, at -6.44% (10-K, filed 2024-02-20).
Return on Invested Capital stays at or above 12.9%
Today 16.14%. This indicator depends on inputs (market price, multi-statement composites) whose history is not deep enough to re-derive it with the same formula as the live value, so no honest retro-test exists for it.
Dividend Rate stays at or above $6.85
Today $6.92. This indicator depends on inputs (market price, multi-statement composites) whose history is not deep enough to re-derive it with the same formula as the live value, so no honest retro-test exists for it.
3. What would break it
- A filed year in which revenue growth 1y fell below 0%.
- A filed year in which return on invested capital fell below 12.9%.
- A filed year in which dividend rate fell below $6.85.
4. The published tests it meets today
Of 30 tests value investors published: 2 met, 20 not met, 8 we could not complete. Counts, never a score.
Meets: ROIC at or above WACC; Cash-covered dividend.
What this cannot tell you
What the numbers say today, not the day one stops being true. The reasons are not written down.
An account adds
One email the night a number you wrote down breaks. Silence otherwise.
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How this is computedA computation on accounts filed with the SEC, not a recommendation and not advice. Past filings do not indicate future results. Risk disclaimer.