How sustainable is AMGN's earnings growth trajectory?

Amgen's earnings growth trajectory appears to be complex and multifaceted, with both promising signs and potential challenges:

1. **Recent Performance**: Amgen's most recent quarterly report for Q4 2024 shows a net income of $627 million and a total revenue of $9.09 billion. While the company experienced a year-over-year net income decline of 18.25%, its revenue grew by 10.86%. This indicates a notable discrepancy between income and revenue growth.

|code|Ticker|Name|Date|Total Revenue|Net Income|market_code|
|---|---|---|---|---|---|---|
|AMGN|AMGN.O|Amgen|2024 Q1|7.447E9|-1.13E8|185|
|AMGN|AMGN.O|Amgen|2024 Q2|8.388E9|7.46E8|185|
|AMGN|AMGN.O|Amgen|2024 Q3|8.503E9|2.83E9|185|
|AMGN|AMGN.O|Amgen|2024 Q4|9.086E9|6.27E8|185|

|code|Ticker|Name|Date|Net Income YoY|Total Revenue YoY|market_code|
|---|---|---|---|---|---|---|
|AMGN|AMGN.O|Amgen|2024 Q1|-103.97747272087292|21.98198198198198|185|
|AMGN|AMGN.O|Amgen|2024 Q2|-45.902828136330676|20.068708846263956|185|
|AMGN|AMGN.O|Amgen|2024 Q3|63.58381502890174|23.178328263074025|185|
|AMGN|AMGN.O|Amgen|2024 Q4|-18.252933507170795|10.858955588091753|185|

2. **Long-Term Trends**: Over the past three years, Amgen's net income has shown a compound annual growth rate (CAGR) of -20.99%, while its total revenue has grown by 12.68%. This suggests that although the company has been growing its revenue, the net income has been declining, which could impact the sustainability of its earnings growth.

3. **Analyst Expectations**: Analysts expect Amgen to post earnings of $4.18 per share in the current quarter, indicating a year-over-year growth of 5.56%. This suggests a modest recovery in earnings growth, which could be a positive sign for the sustainability of its earnings trajectory.
4. **Market Conditions and Challenges**: The biotechnology sector, including Amgen, has faced challenges such as potential tariffs and a competitive landscape. These factors could impact the company's future earnings growth if they continue to affect the industry negatively.
5. **Financial Health and Dividend Profile**: Amgen's financial strength is highlighted by its consistent revenue growth and a high gross margin percentage. The company has also been increasing its dividends since 2011, with a 5-year growth rate of 9.4%. This indicates a stable financial profile that could support sustainable earnings growth.
6. **Valuation and Analyst Ratings**: The stock has a neutral consensus rating from analysts, with an average price target of $300.63. This suggests a cautious optimism regarding the company's future performance, which could be influenced by earnings growth.

In conclusion, while Amgen has shown resilience in revenue growth and has a stable dividend profile, the decline in net income and the impact of external factors on the biotechnology sector pose challenges to the sustainability of its earnings growth trajectory. The company's future performance will likely depend on its ability to manage these challenges and maintain its competitive edge in the market.