Takeda Pharmaceutical Company Limited American Depositary Shares (each representing 1/2 of a share of Common Stock) (TAK)

FairStock Score: 35/100 — MIXED

Key Financials

Strengths

• Generates $536.7 billion in annual free cash flow (1025.3% yield on market cap)
• Strong Piotroski F-Score of 7/9 indicating robust financial health across profitability, leverage, and efficiency metrics
• Attractive 4.0% dividend yield providing steady income returns
• Established organization with 47,455 employees providing operational scale

Concerns

• Elevated P/E of 75.7x prices in substantial future growth that may not materialize
• Altman Z-Score of 0.3 places it in the financial distress zone—elevated bankruptcy risk

AI Analysis

Takeda Pharmaceutical Company Limited American Depositary Shares (each representing 1/2 of a share of Common Stock) is a large-cap healthcare company valued at $52.3 billion. The business generates $4.5 trillion in annual revenue with a 2.3% net margin and $536.7 billion in free cash flow. From a quality standpoint, Takeda shows solid Piotroski F-Score of 7/9 and distressed Altman Z-Score of 0.3 warrants caution. On valuation, the stock is commanding a steep 75.7x multiple, with offers a 89% margin of safety vs Graham Number of $155. Growth dynamics show revenue growing at 4.2% and profit growth of 335.7%. The 4.0% dividend yield adds an income component for patient holders. Our composite FairStock Score of 35/100 reflects below-average fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

Improving fundamentals and sector tailwinds could drive meaningful earnings growth, compressing the effective multiple for patient investors. With $536.7 billion in annual free cash flow (1025.3% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

At 76x earnings, any growth disappointment triggers rapid multiple compression—a 20% earnings miss plus multiple contraction to 20x implies 40%+ downside. Sluggish 4% growth in a large-cap company leaves the stock vulnerable to de-rating if the market rotates toward higher-growth opportunities.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer