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Takeda Pharmaceutical Company Limited

TAK
29
Drug Manufacturers - Specialty & Generic · Healthcare
Exchange
New York Stock Exchange
Winston Score
29
Winston is worried
Below-average fundamentals — multiple weak pillars.

Takeda Pharmaceutical is a large Japanese drug company that discovers, makes, and sells prescription medicines to patients around the world. Its main focus areas include rare diseases, cancer, digestive disorders, and neuroscience, with key drugs like Entyvio (for bowel disease) and a growing rare disease portfolio. Takeda is one of the largest pharmaceutical companies in Asia and ranks among the top 15 globally by revenue.

The company earns money by selling branded prescription drugs to hospitals, clinics, and pharmacies, primarily in the United States, Europe, and Japan. Takeda's competitive position rests on its specialized drug portfolio and a significant research pipeline, though it carries a heavy debt load from its $62 billion acquisition of Shire in 2019. The biggest risk facing Takeda is patent expiration on Entyvio, its top-selling drug, which faces biosimilar competition in the coming years and currently accounts for a large share of revenue.

Winston Score History

Growth Profile

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

+5.8% YoY

YoY Growth Rate

Slow revenue growth

EPS Growth

+75.7% YoY

YoY Growth Rate

EPS growth accelerating

Insider Activity

0.8%ownership

Relatively low insider ownership

Cash Runway

5+ years

Quarterly Free Cash Flow

↑ Burn rate improving

$1.0T cash & investments at current burn rate

Growth context

Takeda Pharmaceutical Company Limited is growing revenue at 6% year-over-year. The Winston Score measures business quality today — these growth metrics show what could matter tomorrow.

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Score breakdown

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Quality

Gross Margin
48.8%
Healthy — 48.8% gross margin
Operating Margin
4.3%
Thin — 4.3% operating margin
ROCE
0.4%
Weak — 0.4% return on capital

ROIC between 0% and 5%. They earn a few cents back per dollar invested in the business.

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Growth

Sales YoY
+0.4%
Nearly flat sales (0.4% YoY)
EPS YoY
-114.4%
Earnings shrinking (-114.4% YoY)

Earnings per share down more than 10%. Either a bad year, or a real decline.

EPS Consistency
2/8 quarters
Earnings rarely grow — volatile business

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Cash Flow

Cash Conversion
N/A
Data not available
FCF Margin
13.9%
Converts sales into free cash efficiently (13.9%)

FCF margin between 10% and 20%. Every $100 in sales becomes $10 to $20 in real cash.

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Stability

Debt / Equity
0.63
Moderate — manageable debt (0.63)
Interest Cover
0.93x
Dangerous — barely covers interest (0.9x)

Interest coverage below 1. Their profits don't cover the interest bill.

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Valuation

P/E Ratio (TTM)
0.3x
no trend
Attractive valuation — P/E 0.3

P/E under 10. The price tag is small relative to last year's profit.

P/E vs Forward
+0.1
GROWING
Earnings roughly flat

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Dividends

Dividend Yield
3.78%
no trend
Moderate income — 3.78% yield

Standard yield zone for stable dividend payers. A meaningful piece of total return.

Dividend Growth
-1.5%
no trend
Dividend cut (-1.5% YoY) — warning sign

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