GSKGSK plc
Is the business good?
The checks split: nothing decisive, though earnings fully cash-backed (1.1×).
Operating profit is fully backed by cash. Conversion is worsening vs a year ago.
Positive operating leverage, operating profit is growing faster than sales, so margins widen as the business scales.
Margin-driven, fat margins on slower asset turns. ROE 35% = margin × turnover × leverage.
Unless marked, from derived.
Where this answer is blind. The F-score rewards improvement, so an already-elite company can score mid-pack.
How good a business is GSK?
GSK plc earns 20% on the capital it employs against a 9.0% cost of capital, so the business is worth more the bigger it gets.
Return on invested capital · cost of capital 9.0% · 11 points above what the capital costs: growth creates value
- Operating margin
- 24%
Operating margin · Drug Manufacturers - General median 24% · fiscal year to FY2025
- Cash conversion
- 1.15×
Cash conversion · 1.92× a year ago · operating cash flow covers the operating profit after tax
- Share count, year on year
- −0.60%
Share count, year on year · flat: no meaningful dilution
| Year | Operating margin |
|---|---|
| FY2020 | 25% |
| FY2021 | 18% |
| FY2022 | 22% |
| FY2023 | 22% |
| FY2024 | 13% |
| FY2025 | 24% |
Details›
- Gross marginfiscal year to FY2025
- 72%
- Operating marginfiscal year to FY2025
- 24%
- Net marginfiscal year to FY2025
- 18%
- Free cash flow margin
- 20%
- R&D as % of revenue
- 23%
- Revenue, trailing twelve months
- $32.7B
- Free cash flow, trailing twelve months
- $6.39B
- Net income, trailing twelve months
- $5.72B
- Return on invested capitaloperating profit after tax ÷ debt + equity − cash
- 20%
Margins, capital and share counts from the statements as filed with the SEC; cash conversion is operating cash flow over operating profit after tax.
Drug Manufacturers, General
Ranks #3 of 7 by RyuScore