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TEVA, Teva Pharmaceutical Industries Limited

Pharmaceuticals consumer brand Distress / turnaroundRevenue in runoff

We operate worldwide, with headquarters in Israel and a significant presence in the United States, Europe and many other markets around the world.

From innovating in the fields of neuroscience and immunology to providing complex generic medicines, biosimilars and pharmacy brands worldwide, we are dedicated to addressing patients' needs, now and in the future.

Today, our global network of capabilities consists of approximately 34,000 employees across 57 markets.

Latest annual: FY2025 10-K

TEVA · Teva Pharmaceutical Industries Limited

The business

What it sells, where the money comes from, the kind of company it is.

Revenue · FY2025

$17.3B

+4.3% YoY · 1% 5-yr CAGR

Vital signs · TTM, with 5-yr average

Revenue $17.3B 5-yr avg $16.1B

Gross margin 52% 5-yr avg 49%

Operating margin 13.2% 5-yr avg 1.9%

ROIC 6% 5-yr avg 2%

Owner-earnings margin 7% 5-yr avg 5%

Free cash flow margin 7% 5-yr avg 5%

The business in brief

read the 10-K →

What this business is and what moves its needle, from its own SEC filings.

What it is: Revenue is led by United States (53%) and Europe (29%), with 2 more segments behind.
Situation: Distress / turnaround. Thin interest coverage, or operating cash burned against real debt, across the record. The balance sheet carries this situation; the debt schedule sets the clock. Revenue in runoff. Revenue has shrunk about 3% a year across the record while operations still generate cash.
What moves the needle: Operating margin has reached 12% at its best but run negative through the cycle (median −2.6%) on a 48% gross margin — so the question is which reading is truer: whether the median was pulled below zero by one-off charges, by the cycle, or by spending it is still growing into, and whether it settles back at a profit. Inventory runs near 24% of sales, so how fast it turns back into cash — and the risk of writing it down when demand softens — sits alongside the margin. Read this kind of business on the pipeline against the patent cliff, and pricing. On its own account, the filing leans hardest on pricing power & competition, set against the numbers in what the filing emphasizes, below.
Is it a good business?: Return on capital has rarely cleared the cost of capital (median −2%, above 15% in 0 of 8 years). By owner earnings: roughly 6% of revenue reaches owners as cash, consistently. This is price-taker territory, where the balance sheet and the cycle matter more than any multiple; the rest is in the 10-K.

Every line is arithmetic on the company's filings, shown in full in the sections below.

Where the money comes from

read the 10-K →

Revenue spreads across 4 segments, the largest United States at 53%.

Revenue by reportable segment, FY2025

United States53%$9.2B
Europe29%$5.0B
International Markets12%$2.2B
Other Activities5%$870M

From the segment footnote of the company's own 10-K. Shares are of total revenue; the profit bar shows each segment's share of segment operating profit, before unallocated corporate costs.

The record

Ten years of arithmetic, read across the cycle.

The record, 2016–2025

realized figures from each filing · older years to the left

2016’16	2017’17	2018’18	2019’19	2020’20	2021’21	2022’22	2023’23	2024’24	2025’25	TTMTTMMar 2026
											Income statement
$21.9B	$21.9B	$18.3B	$16.9B	$16.7B	$15.9B	$14.9B	$15.8B	$16.5B	$17.3B	$17.3B	RevenueRevenue
53%	49%	45%	45%	46%	48%	47%	48%	49%	52%	52%	Gross marginGross mgn
6%	7%	7%	7%	7%	7%	8%	7%	7%	7%	7%	SG&A / revenueSG&A/rev
2%	1%	1%	6%	6%	6%	1%	6%	6%	6%	6%	R&D / revenueR&D/rev
$2.2B	($17.5B)	($1.6B)	($443M)	($3.6B)	$1.7B	($2.2B)	$433M	($303M)	$2.2B	$2.3B	Operating incomeOp. inc.
9.8%	−80.0%	−9.0%	−2.6%	−21.4%	10.8%	−14.7%	2.7%	−1.8%	12.5%	13.2%	Operating marginOp. mgn
$329M	($16.3B)	($2.1B)	($999M)	($4.0B)	$417M	($2.4B)	($559M)	($1.6B)	$1.4B	$1.6B	Net incomeNet inc.
											Cash flow & returns
$3.9B	$2.2B	$2.4B	$748M	$1.2B	$798M	$1.6B	$1.4B	$1.2B	$1.6B	$1.7B	Operating cash flowOp. cash
$1.5B	$2.1B	$1.8B	$1.7B	$1.6B	$1.3B	$1.3B	$1.2B	$1.1B	$1.0B	$997M	DepreciationDeprec.
$1.9B	$16.2B	$2.6B	($94M)	$3.5B	($1.1B)	$2.6B	$653M	$1.7B	($920M)	($1.0B)	Working capital & otherWC & other
$901M	$874M	$651M	$525M	$578M	$562M	$548M	$526M	$498M	$501M	$542M	CapexCapex
4.1%	4.0%	3.6%	3.1%	3.5%	3.5%	3.7%	3.3%	3.0%	2.9%	3.1%	Capex / revenueCapex/rev
$3.0B	$1.4B	$1.8B	$223M	$638M	$236M	$1.0B	$842M	$749M	$1.1B	$1.2B	Owner earningsOwner earn.
13.6%	6.2%	9.8%	1.3%	3.8%	1.5%	7.0%	5.3%	4.5%	6.7%	6.8%	Owner earnings marginOE mgn
$3.0B	$1.4B	$1.8B	$223M	$638M	$236M	$1.0B	$842M	$749M	$1.1B	$1.2B	Free cash flowFCF
13.6%	6.2%	9.8%	1.3%	3.8%	1.5%	7.0%	5.3%	4.5%	6.7%	6.8%	Free cash flow marginFCF mgn
$36.1B	$0	—	—	$0	$0	$7M	$0	$15M	$0	$0	AcquisitionsAcquis.
$1.3B	$901M	$12M	—	—	—	—	—	—	—	$12M	Dividends paidDiv. paid
—	-29%	-3%	-1%	-8%	4%	-7%	—	-1%	10%	6%	ROICROIC
1%	-94%	-15%	-7%	-40%	4%	-31%	-7%	-31%	18%	19%	Return on equityROE
−3%	−99%	−15%	—	—	—	—	—	—	—	19%	Retained to equityRetained/eq
											Balance sheet
$988M	$963M	$1.8B	$2.0B	$2.2B	$2.2B	$2.8B	$3.2B	$3.3B	$3.6B	$3.7B	Cash & investmentsCash+inv
$7.5B	$7.1B	$5.8B	$5.7B	$4.6B	$4.5B	$3.7B	$3.4B	$3.1B	$3.7B	$3.4B	ReceivablesReceiv.
$5.0B	$4.9B	$4.7B	$4.4B	$4.4B	$3.8B	$3.8B	$4.0B	$3.0B	$3.2B	$3.2B	InventoryInvent.
$2.2B	$2.1B	$1.9B	$1.7B	$1.8B	$1.7B	$1.9B	$108M	$158M	$225M	$2.6B	Accounts payablePayables
$10.3B	$10.0B	$8.7B	$8.4B	$7.2B	$6.7B	$5.6B	$7.3B	$5.9B	$6.7B	$4.0B	Operating working capitalOper. WC
$17.2B	$15.4B	$13.8B	$13.5B	$13.0B	$12.6B	$12.1B	$12.5B	$12.6B	$13.9B	$13.7B	Current assetsCur. assets
$18.5B	$17.9B	$14.3B	$13.7B	$13.2B	$11.0B	$11.5B	$12.2B	$12.8B	$13.5B	$13.5B	Current liabilitiesCur. liab.
0.9×	0.9×	1.0×	1.0×	1.0×	1.1×	1.1×	1.0×	1.0×	1.0×	1.0×	Current ratioCurr. ratio
$44.4B	$28.4B	$24.9B	$24.8B	$20.6B	$17.6B	$17.2B	$17.2B	$15.1B	$16.0B	$15.8B	GoodwillGoodwill
$93.1B	$70.6B	$60.7B	$57.5B	$50.6B	$47.7B	$45.9B	$43.5B	$39.3B	$40.7B	$40.0B	Total assetsAssets
$33.3B	$31.7B	$28.5B	$26.5B	$25.5B	$23.1B	$21.3B	$19.9B	$17.8B	$16.9B	$31.4B	Total debtDebt
$32.3B	$30.7B	$26.7B	$24.5B	$23.3B	$21.0B	$18.5B	$16.7B	$14.5B	$13.3B	$27.7B	Net debt / (cash)Net debt
3.9×	-20.0×	-1.8×	-0.5×	-4.0×	1.9×	-2.4×	0.4×	-0.3×	2.4×	2.5×	Interest coverageInt. cov.
$33.3B	$17.4B	$14.7B	$14.0B	$10.0B	$10.3B	$7.8B	$7.5B	$5.4B	$7.9B	$8.2B	Shareholders’ equityEquity
0.6%	0.6%	0.8%	0.7%	0.8%	0.7%	0.8%	0.8%	0.7%	0.9%	1.0%	Stock comp / revenueSBC/rev
$900M	$17.1B	$3.0B	—	$4.6B	—	$2.0B	$700M	$1.3B	—	—	Goodwill written downGW imp.
											Per share
961M	1.02B	1.02B	1.09B	1.09B	1.11B	1.11B	1.12B	1.13B	1.16B	1.18B	Shares out (diluted)Shares
$22.79	$21.51	$17.90	$15.48	$15.21	$14.34	$13.45	$14.16	$14.63	$14.84	$14.72	Revenue / shareRev/sh
$0.34	$-16.01	$-2.11	$-0.92	$-3.64	$0.38	$-2.20	$-0.50	$-1.45	$1.21	$1.33	EPS (diluted)EPS
$3.11	$1.33	$1.76	$0.20	$0.58	$0.21	$0.94	$0.75	$0.66	$0.99	$0.99	Owner earnings / shareOE/sh
$3.11	$1.33	$1.76	$0.20	$0.58	$0.21	$0.94	$0.75	$0.66	$0.99	$0.99	Free cash flow / shareFCF/sh
$1.36	$0.89	$0.01	—	—	—	—	—	—	—	$0.01	Dividends / shareDiv/sh
$0.94	$0.86	$0.64	$0.48	$0.53	$0.51	$0.49	$0.47	$0.44	$0.43	$0.46	Cap. spending / shareCapex/sh
$34.69	$17.09	$14.40	$12.81	$9.16	$9.28	$7.03	$6.71	$4.75	$6.80	$6.98	Book value / shareBVPS

Per-share growththe realized rate an owner's share compounded

	9-yr	5-yr
Revenue / share	−4.7%/yr	−0.5%/yr
Owner earnings / share	−12.0%/yr	+11.1%/yr
EPS	+15.1%/yr	—
Dividends / share	−90.7%/yr (2-yr)	−90.7%/yr (2-yr)
Capital spending / share	−8.3%/yr	−4.0%/yr
Book value / share	−16.6%/yr	−5.8%/yr

The record, charted

FY2016–2025

Each measure over its full record; the current point and the worst year marked.

Share count

1.2Bpeak FY2025

ROIC

10%low FY2017

Gross margin

52%low FY2019

Net debt ÷ owner earnings

11.6×peak FY2019

Owner earnings vs. net income

Owner earningsNet income

The accountant's number, and the cash an owner can take; the gap is the tell.

$1.1Bowner earningsvs.$1.4Bnet incomelow FY2019

Where the cash went

ReinvestBuybacksDividendsAcquisitionsRetainedBeyond op. cash

Each year's outlays against its operating cash: the mix, and how it drifts. The hatched cap is spending beyond that year's operating cash — financed from the balance sheet or borrowing, not operations.

FY2016FY2025

Owner-earnings bridge

FY2021–FY2025cash-flow statement, SEC EDGAR →

Net income is the accountant's number; owner earnings is the cash an owner could take out. The walk between them, off the cash-flow statement, and whether the gap is widening or holding.

In fiscal 2025 the business reported $1.4B of profit but $1.1B of owner earnings: $262M less than the profit line, taken out by capital spending and the timing of cash.

Reported net income$1.4B

Owner earnings$1.1B · 7% of revenue

	FY2025	FY2024	FY2023	FY2022	FY2021
Reported net income	$1.4B	($1.6B)	($559M)	($2.4B)	$417M
Depreciation & amortizationnon-cash charge added back	+$1.0B	+$1.1B	+$1.2B	+$1.3B	+$1.3B
Stock-based compensationreal costnon-cash, but a real cost	+$157M	+$123M	+$121M	+$124M	+$119M
Working capital & othertiming of cash in and out, other non-cash items	−$920M	+$1.7B	+$653M	+$2.6B	−$1.1B
Cash from operations	$1.6B	$1.2B	$1.4B	$1.6B	$798M
Capital expenditurecash put back in to keep running and to grow	−$501M	−$498M	−$526M	−$548M	−$562M
Owner earnings	$1.1B	$749M	$842M	$1.0B	$236M
Owner-earnings marginowner earnings ÷ revenue	7%	5%	5%	7%	1%

Owner earnings is the cash an owner could pull out without starving the business: operating cash less the capital it must spend to hold its position . The cash-flow statement also adds stock comp back as non-cash, but it is a real cost paid in shares; counted as the expense it is (less $157M), owner earnings is nearer $991M.

Much of fiscal 2025's profit didn't arrive as operating cash; it sits in “working capital & other” above. That can be a real inventory or timing swing, or profit that doesn't run through operating cash at all: a heavy tax year, equity-method earnings, or investment income booked through investing. For a year like this, owner earnings understates the cash earned; the full cash-flow statement carries the rest.

Maintenance capex is estimated as depreciation where a growing business invests above it; free cash flow is the figure the scorecard's free-cash margin reads.

III

Quality & stewardship

Returns, the balance sheet, capital allocation, and pay.

Owner’s Scorecard

FY2025 10-K · source on SEC EDGAR →

Will it survive?

Can it pay its interest? 2.4×

Adequate

Operating income $2.2B ÷ interest expense $916M

What this means
Comfortable in a normal year, but below the margin of safety Graham looked for. Worth checking how stable the coverage has been across a full cycle.
How heavy is the debt, net of cash? $27.1B · 12.6× operating profit

Heavy net debt

Cash $3.6B − debt $30.6B

What this means
Netting $3.6B of cash and short-term investments against $30.6B of debt leaves $27.1B owed, about 12.6× a year's operating profit (14.2× on the gross debt, before the cash). Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.
How long is cash tied up? 208d

Long (60+ days)

DSO 78 + DIO 139 − DPO 10 days

What this means
Days cash is tied up between paying suppliers and collecting from customers. Lower is better; a long cycle means growth itself eats cash.

Is it a good business?

Return on invested capital -3%

Below average through the cycle

8-yr median, range -29%–10%; 6% latest = NOPAT $2.2B ÷ invested capital $35.0B

Industry peers: median 17%

What this means
The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; a return below the cost of capital (~8%) erodes value as a business grows rather than building it — the test Buffett weighs most. The headline is the median of the last 8 years (it ran 6% most recently), so one peak or trough year doesn't set the verdict. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.
Owner-earnings margin 5%

Solid through the cycle

10-yr median margin, range 1%–14%; latest $1.1B = operating cash $1.6B − maintenance capex $501M

Industry peers: median 17%

What this means
What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's 7% of revenue this year, a 5% median across 10 years. Treating stock comp as the real expense it is (less $157M of SBC) leaves $991M.
Are earnings backed by cash? 1.17×

Cash-backed

Cash from ops $1.6B ÷ net income $1.4B

What this means
How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.

How is the cash used?

Where do the earnings go? 1%

Reinvests most of it

Dividends + buybacks $12M ÷ Owner Earnings $1.1B

What this means
Of $1.1B Owner Earnings, $12M (1%) went back to shareholders, $12M dividends, $0 buybacks. Returning most of it is the mark of a mature business with little left to reinvest at a high return; reinvesting most could mean a long runway, or empire-building. The split doesn't say which; the return earned on it (see ROIC) does.
Investing or harvesting? 0.50×

Harvesting

Capex $501M ÷ depreciation $1.0B

What this means
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.

Graham’s defensive tests · 1 of 5 met

Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.

Adequate size Pass

Revenue ≥ $2B · $17.3B

What this means
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
Strong liquidity Miss

Current ratio ≥ 2× · 1.04×

What this means
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
Conservative debt Miss

Debt ≤ working capital · $30.6B vs $490M WC

What this means
Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.
Earnings stability Miss

A profit every year (10-yr record) · 7 loss years

What this means
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
Dividend record Miss

Uninterrupted dividends · 3 of 10 yrs

What this means
An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.
Earnings growth —

Earnings +33% over the record · —

What this means
Earnings were negative early in the record, a growth rate isn't meaningful.
Moderate price —

P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price

What this means
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are $-0.23/share (latest year $1.21), the averaged base the calculator's gate runs on, and book value is $6.79/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.

Durability & moat, 2016–2025

Whether the record’s returns held, and what the capital reinvested earned.

Profitable years 3 of 10

What this means
Lost money in 7 year(s), look at what happened there before trusting the average.
Return on capital ≥ 15% 0 of 10 yrs

What this means
A moat shows up as a high return on invested capital that holds year after year, not one good vintage.
Operating margin −26% → 4% (3-yr avg ends)

In the filing’s words The filing ties gains to its own pricing, but names price competition too — pricing power that is real yet contested, not unopposed. The margin shows who is winning.

What this means
Through the cycle the operating margin widened — about −26% early to 4% lately, median −3% — pricing power intact or improving.
Reinvestment, incremental ROIC returns capital

What this means
The capital base barely grew: this business returns cash through dividends and buybacks rather than reinvesting. Judge it on the cash returned, not on compounding.
Owner earnings growth −9%/yr

What this means
Owner earnings shrank about 9% a year over the record.
Worst year 2017 · −80.0% op. margin

What this means
Operations went underwater in 2017, understand why before trusting the good years.
Share count +2.1%/yr

What this means
The share count is rising, dilution works against you on a per-share basis.
Dividend record paid

What this means
Paid a dividend in 3 of the years on record.

Does AI threaten the moat?

Low contestability

The moat is physical, regulated or balance-sheet-funded, the kind AI cuts costs within but does not contest.

In its own filing A competitive risk, new this year

Its FY2025 10-K names artificial intelligence as a competitive threat, in language that was not in the prior year's filing.

“Additionally, rapid technological changes and competitive pressures may require significant ongoing investment to maintain effective and responsible AI capabilities.”

AI is unlikely to contest a moat that is physical, regulated or balance-sheet-funded; here it reads more as a cost tool than a threat, and the company is using it that way.

Read from the filing's own risk factors, paired with the industry's structure under its SIC code; the durability is read above, the price below.

All figures as filed; the source filing is linked above.

Current Position

as of the latest quarter, Mar 31, 2026

Can the business pay what it owes this year, off the freshest balance sheet: the quality of the assets, the debt actually coming due, and what a low ratio means here.

Current assets$13.7B

Cash & short-term investments$3.7B
Receivables$3.4B
Inventory$3.2B
Other current assets$3.4B

Current liabilities$13.5B

Debt due within a year$2.6B
Accounts payable$2.6B
Other current liabilities$8.3B

Current ratio1.01×all current assets ÷ what's due · Graham looked for 2×

Quick ratio0.78×stricter: inventory excluded

Cash ratio0.28×strictest: cash alone against what's due

Working capital$178Mthe cushion left after near-term bills

Debt due this year vs. cash$2.6B due · $3.7B cash covered by cash on hand, no refinancing forced · both figures from the Mar 31, 2026 balance sheet

Revenue, latest quarter vs. a year ago+2.3%the freshest read on whether the business is still growing

Current ratio, recent quarters0.9× → 1.0×

Deeper floors

Tangible book value($11.2B)equity stripped of goodwill & intangibles

Net current asset value($18.1B)Graham's net-net: current assets less all liabilities

Debt incl. operating leases$32.0B$568M of it operating leases

From the company's latest filing.

How the cash was used, 2016–2025

Over the record, the business generated $17.2B of operating cash; how management split it reads as a balanced allocator, splitting cash between the business, owners, and the balance sheet.

Reinvested$6.2B · 36%
Dividends$2.2B · 13%
Retained (debt / cash)$8.8B · 51%

Returned to owners$2.2B
20% of the owner earnings the business produced over the span, $2.2B as dividends and $0 as buybacks.
Net change in share count22.7%
The diluted count rose from 961M to 1179M: issuance (stock pay, deals) outran any buybacks, so owners were diluted on net.
Dividend record$0.01/sh
Paid in 3 of the years on record, the per-share dividend shrinking about 91% a year. It was cut at least once along the way.

Buybacks are gross of stock issued to staff; the share-count line above is the net of that, the figure that decides whether owners gained. The average price paid blends a year of purchases (and any accelerated repurchase), so it is close, not exact. The record of where the cash went and on what terms.

Acquisitions & goodwill

from the balance sheet & the 10-year cash-flow record

Goodwill grows only when a company acquires and falls only when it concedes it overpaid. The size of that bet, the cash put into buying rather than building, and how much has already been written off.

Goodwill & intangibles$19.8B49% of all assets; the premium carried on the balance sheet for businesses acquired

Against book equityexceeds itgoodwill alone is larger than the company’s entire book equity; stripped of the acquisition premium, there is no net book worth

Cash spent acquiring$36.2Bover 10 years buying other businesses, against $6.2B of capital spent building

$29.7B written down across 7 years (2016, 2017, 2018, 2020, 2022, 2023, 2024): goodwill the company has already conceded it overpaid for, charged against earnings. That is roughly 82% of the cash it put into acquisitions over the span. A write-down costs no cash (the cash went out when the deal was signed), but it is management marking its own past judgment to market.

Goodwill, acquired intangibles and equity from the latest balance sheet; acquisition spend and write-downs summed across the 10-year record, from the company's own filings.

Management, ownership & pay

read the proxy →

From the proxy: how much of the business the people running it own, and how they are paid, beside what the business earned for its owners in the same years.

Fiscal year	Chief executive	Pay, as filed	“Actually paid”	Owner earnings
2021	Kåre Schultz	$14.7M	$7.6M	$236M
2022	Kåre Schultz	$15.5M	$17.2M	$1.0B
2023	Richard Francis	$25.7M	$26.2M	$842M
2024	Richard Francis	$15.5M	$40.9M	$749M
2025	Richard Francis	$19.2M	$55.0M	$1.1B

Both pay figures are the company’s own, from the pay-versus-performance table its proxy statement files. “As filed” is the Summary Compensation Table total: salary, bonus, and equity awards at their value on the day of grant. “Actually paid” is the SEC’s prescribed recalculation, which re-marks those equity awards to what they became as they vested; it can swing far above or below the filed figure in either direction, and negative years occur. Owner earnings are the whole business's, from the record above, for the same fiscal years.

Stock-based compensation$157M
The slice of the business handed to employees in shares this year, 1% of revenue, equal to 7% of operating profit. Buffett's oldest accounting fight: this is compensation, compensation is an expense, real whether or not the headline earnings admit it. One trap: the cash-flow statement adds SBC back, so the operating cash, and the owner earnings drawn from it, are flattered by exactly this amount; counted as the cost it is, what an owner keeps is lower.

Inverting the record

Invert: instead of why Teva Pharmaceutical Industries Limited is a good business, the question is what would make owning it a mistake, and whether those marks are in the record. Disconfirming tests across 2016–2025.

3 of the 5 tests turned up something to look into; the other 2 came back clean.

Look hereIs it less profitable than it was?5.5% vs 9.9%
The owner-earnings margin averaged 9.9% early in the record and 5.5% across the last three years, and the latest year has not recovered. Ask the filing whether that is a structural drift or a cyclical trough — price, mix, cost, or a competitor — and whether it is permanent.
Look hereDid the share count rise anyway?22.7%
Diluted shares grew 22.7% over 2016–2025. Owners were diluted on net; each share owns less of the business than it did. Read the buyback line beside this one, not on its own.
Look hereAre "one-time" charges a yearly habit?10 of 10 years
Management took an impairment or write-down in 10 of the last 10 years, $72.1B in all. A charge taken almost every year is not one-time; it is the business — past deals coming due, and an admission the assets were worth less than what was paid. Munger's rule: when the "one-time" keeps happening, it is the business. Read it beside the goodwill the company still carries.

And these came back clean

Did debt outgrow the business?
Did receivables and inventory outpace sales?

Each test is read from the filings and is noisy alone; a flag can mark a cyclical trough or a year of heavy investment as easily as a problem. The filing says which.

What an owner would ask, FY2025

read the 10-K →

Which reported numbers are a judgment call?
Management names Revenue recognition, Income taxes, Acquisitions, Contingencies as critical estimates
each rests partly on management's judgment; the filing's note sets out the assumptionsverify →

The questions the record and the charts do not answer on their own; each carries the figure and the place to look.

Peers, Pharmaceuticals

The same industry, side by side on owner economics. Each figure is a through-cycle median, so a peak or trough year can’t distort it; the group median at the foot is the line to read each against.

Company	Revenue	Gross margin	Op. margin	ROIC	Owner earn. margin
ABTAbbott Laboratories	$44.3B	56%	15.8%	11%	17%
TEVATeva Pharmaceutical Industries Limited	$17.3B	48%	-2.2%	-2%	6%
REGNRegeneron Pharmaceuticals Inc.	$14.3B	—	34.6%	21%	31%
VTRSViatris	$14.3B	34%	2.5%	0%	14%
VRTXVertex Pharmaceuticals Incorporated	$12.0B	87%	31.8%	36%	34%
BHCBausch Health Companies Inc.	$10.3B	76%	5.5%	2%	13%
ZTSZoetis Inc.	$9.5B	69%	34.2%	26%	22%
OGNOrganon	$6.2B	62%	25.0%	17%	12%
Group median	—	62%	20.4%	14%	16%

The price

What a price has to assume.

What the price implies

reverse-DCF

Type today's close and see the owner-earnings growth you'd have to believe to justify it, beside what Teva Pharmaceutical Industries Limited has delivered.

Teva Pharmaceutical Industries Limited’s latest year runs above its own through-cycle margin — the reported figure may flatter a peak. So the tool opens on the through-cycle base, Graham’s averaging cutting both ways; clear the toggle below to read the latest year exactly as reported.

Today’s price $

Through the cycle, Teva Pharmaceutical Industries Limited earns about $992M on its 5.7% median owner-earnings margin. This year’s 6.7% margin runs above that; the reported figure may flatter a peak you'd be paying on. Normalize, below, values the price on that through-cycle figure rather than the latest year. It comes pre-checked here for that reason, the same rule that already normalizes a trough; clear it to price the year as filed.

Base Normalize · through-cycle ($992M) Net of stock comp (−$166M)

—

The assumptions Required return 9% Years of high growth 10 Terminal growth 2.5%

9.0% = the 4.55% 10-year Treasury (Jul 15, 2026) + 4.45 points of equity premium. The rate you require is yours to set.

Enter a price above to run it.

Implied by the price—

Owner-earnings growth · ’21→’25+10%/yr

Owner-earnings growth · ’16→’25−9%/yr

Owner-earnings yield—

P/E (3-yr earnings ’23–’25)—

P/B—

Graham’s price gate—

Graham capped the multiple at 15×; Buffett and Munger let that rule go: a wonderful business can deserve 50× if the thesis holds. The gate marks the bargain-hunter's floor.

Against a high-grade bond: Graham’s yardstick bond yield%

Prefilled with the 10-year Treasury (4.55%, as of Jul 15, 2026). Edit it for today’s exact figure, or a AAA corporate yield.

Graham measured a stock against the bond you could own instead, the heart of his margin of safety. Enter a price above to weigh the owner-earnings yield against this bond.

Owner earnings $1.2B on 1164M shares outstanding, per the 10-Q cover, as of 2026-03-31; net debt $27.7B. The base opens on the through-cycle figure (the latest year sits above the record’s own median, and Graham’s averaging cuts both ways); clear Normalize to use the year as filed. Net of stock comp treats option pay as the expense it is. The dials set the multiple a growth belief justifies; the price, and every dollar on this page, is yours.

Weigh TEVA against another business →

Cite: Owner Scorecard, "Teva Pharmaceutical Industries Limited (TEVA), the owner's record," https://ownerscorecard.com/c/TEVA, data as of 2026-07-09.

Manual order: ← TER its page in the Manual TEX →

Industry order: ← TBPH the Pharmaceuticals chapter TGTX →