MeritValue

Merck & Co., Inc.

MRKdata completeness 100%19 fiscal years on file
The thesis, from the filings

Merck & Co., Inc. earns about 18% on invested capital, far above its ~9% cost of capital, with a roughly flat share count — a real edge showing up in the numbers. The estimate methods put fair value between $60.01 and $153.17 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$48.7B1$59.3B2$60.1B3$64.2B3$65B3
Net income$13B4$14.5B5$365M6$17.1B6$18.3B6
Operating cash flow$13.1B7$19.1B8$13B9$21.5B9$16.5B9
Capital expenditure$4.45B10$4.39B11$3.86B12$3.37B12$4.11B12
Free cash flow (derived)$8.67B7$14.7B8$9.14B9$18.1B9$12.4B9
Total debt$35.4B13$32.4B14$36.4B15$39.6B16$51.6B16
Cash & equivalents$8.1B17$12.7B18$6.84B19$13.2B20$14.6B20
Diluted shares2.54B2.54B2.55B2.54B2.51B

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$209.84
your share of equity
Profit it earned you last year
$72.81
Free cash flow it threw off
$49.3
Debt you’d be carrying
$205.98

10 shares is a claim on $209.84 of net worth that earned you $72.81 and generated $49.3 of cash last year, against $205.98 of debt.

iii. Is this a good business?
Moat signal · return on invested capital
18% avg · 5y
FY21 20%FY22 23%FY23 2%FY24 24%FY25 20%

It earned about 18% on invested capital, year after year, against a ~9% cost of capital — the footprint of real pricing power. Competition usually drags returns like this back down; here it hasn't.

seeing a moat in the numbers →
Management signal · capital allocation
−1% shares · 5y

Share count is roughly flat over 5 years — little dilution, little buyback. Total debt has risen 46% over the same window.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0

The 3 estimate methods that apply put fair value between $60.01 and $153.17 a share. They rest on different assumptions, so where they diverge is the story; the Graham Number is a stricter floor, not a target.

DCF · Growth Exit 10Y
$153.17
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears10
  • fcfGrowth12.5%
  • fcfBase$12.4B
DCF · Growth Exit 5Y
$104.86
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears5
  • fcfGrowth12.5%
  • fcfBase$12.4B
Earnings Power Value
$60.01
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$14.5B
  • growthAssumed0.0%
Graham Number
$58.63
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

v. The price question — last, on purpose
Is today’s price fair?
See live price ↗
Type a price. The ledger answers.
Or set your own belief
FCF growth, next 5 years12.5%
Discount rate (WACC)8.93%
Terminal growth2.5%
At your growth, a share is worth $104.86
The three cases
Bear0.0%$55.65
Base12.5%$104.86
Bull17.5%$131.24

Bear/base/bull growth = 0% / filed history / history + 5pp. Type a price to see the return each case implies.

Default growth 12.5%= this company’s own filed history (median-to-median FCF CAGR, clamped 0–20%). Your adjustments are recorded anonymously. They become the “what do owners actually believe” dataset.

Sources — the receipts
  1. 10-K · period ending 2021-12-31 · accession 0001628280-24-006850 (Revenues)
  2. 10-K · period ending 2022-12-31 · accession 0001628280-25-007732 (Revenues)
  3. 10-K · period ending 2023-12-31 · accession 0000310158-26-000063 (Revenues)
  4. 10-K · period ending 2021-12-31 · accession 0001628280-24-006850 (NetIncomeLoss)
  5. 10-K · period ending 2022-12-31 · accession 0001628280-25-007732 (NetIncomeLoss)
  6. 10-K · period ending 2023-12-31 · accession 0000310158-26-000063 (NetIncomeLoss)
  7. 10-K · period ending 2021-12-31 · accession 0001628280-24-006850 (NetCashProvidedByUsedInOperatingActivitiesContinuingOperations)
  8. 10-K · period ending 2022-12-31 · accession 0001628280-25-007732 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2023-12-31 · accession 0000310158-26-000063 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2021-12-31 · accession 0001628280-24-006850 (PaymentsToAcquirePropertyPlantAndEquipment)
  11. 10-K · period ending 2022-12-31 · accession 0001628280-25-007732 (PaymentsToAcquirePropertyPlantAndEquipment)
  12. 10-K · period ending 2023-12-31 · accession 0000310158-26-000063 (PaymentsToAcquirePropertyPlantAndEquipment)
  13. 10-K · period ending 2021-12-31 · accession 0001628280-23-005061 (LongTermDebtNoncurrent)
  14. 10-K · period ending 2022-12-31 · accession 0001628280-24-006850 (LongTermDebtNoncurrent)
  15. 10-K · period ending 2023-12-31 · accession 0001628280-25-007732 (LongTermDebtNoncurrent)
  16. 10-K · period ending 2024-12-31 · accession 0000310158-26-000063 (LongTermDebtNoncurrent)
  17. 10-K · period ending 2021-12-31 · accession 0001628280-23-005061 (CashAndCashEquivalentsAtCarryingValue)
  18. 10-K · period ending 2022-12-31 · accession 0001628280-24-006850 (CashAndCashEquivalentsAtCarryingValue)
  19. 10-K · period ending 2023-12-31 · accession 0001628280-25-007732 (CashAndCashEquivalentsAtCarryingValue)
  20. 10-K · period ending 2024-12-31 · accession 0000310158-26-000063 (CashAndCashEquivalentsAtCarryingValue)