Is MRK a good stock to buy now? We came across a bullish thesis on Merck & Co., Inc. on Investomine’s Substack. In this article, we will summarize the bulls’ thesis on MRK. Merck & Co., Inc.’s share was trading at $117.11 as of March 9th. MRK’s trailing and forward P/E were 15.91 and 22.57, respectively according to Yahoo Finance.
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Merck & Co., Inc. operates as a healthcare company worldwide. MRK delivered solid operational performance in fiscal year 2025, supported by continued strength in oncology and vaccines, while maintaining strong profitability and cash generation. Fourth-quarter revenue reached $16.4 billion, up 6% year-over-year, with GAAP EPS of $1.41 and non-GAAP EPS of $1.92, while gross margins remained robust at roughly 77%.
For the full year, revenue grew 8% to $64.2 billion, with GAAP EPS of $5.94 and non-GAAP EPS of $7.82. The company generated approximately $23 billion in operating cash flow and about $19 billion in free cash flow, demonstrating efficient earnings conversion and providing ample capacity to support dividends, research investment, and strategic initiatives.
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Merck’s growth remains anchored by Keytruda, which generated approximately $30.1 billion in revenue in 2025, up 10% year-over-year, benefiting from expanded indications, increasing adoption in earlier lines of therapy, and durable pricing power. Vaccines also contributed meaningfully, with Gardasil generating around $9.2 billion in revenue, supported by strong global demand and expanding vaccination programs. Meanwhile, the Animal Health segment produced roughly $6.0 billion in revenue, offering stable growth and providing diversification with lower volatility than the human pharmaceutical business.
The company continued advancing its pipeline during 2025, with sotatercept gaining traction following approval for pulmonary arterial hypertension and emerging as a potential multibillion-dollar opportunity. Additional oncology combination therapies and several cardiometabolic and immunology assets progressing toward Phase 3 readouts in 2026–2027 are intended to strengthen long-term growth prospects.
Merck maintained disciplined capital allocation, spending approximately $17 billion on R&D while prioritizing bolt-on acquisitions and late-stage assets rather than large-scale deals. Looking ahead, management guided for 2026 revenue of $63.5–$65.5 billion and non-GAAP EPS of $8.20–$8.45, reflecting confidence in near-term growth while acknowledging that long-term value creation will depend heavily on successfully reducing reliance on its flagship drug.
Previously, we covered a bullish thesis on Merck & Co., Inc. (MRK) by Charly AI in April 2025, which highlighted the company’s improving margins, strong free cash flow generation, and strategic expansion in oncology and cardiovascular franchises supporting long-term growth. MRK’s stock price has appreciated by approximately 42.97% since our coverage. Investomine shares a similar view but emphasizes on Merck’s 2025 operational strength, Keytruda-led oncology growth, vaccine momentum, and pipeline progress.
Merck & Co., Inc. is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 100 hedge fund portfolios held MRK at the end of the fourth quarter which was 92 in the previous quarter. While we acknowledge the risk and potential of MRK as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than MRK and that has 10,000% upside potential, check out our report about this cheapest AI stock.
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Disclosure: None.
