Merck Stock Nearly Doubled Without A Change In Its Revenue Growth

Merck (MRK) stock returned about 87% over the past twelve months, climbing from roughly $79 to about $147. Nothing in the year's results looks like that. The medicines Merck sells today grew at their usual pace. Investors spent the year repricing what comes next.

Merck Paid Now For A Medicine That Arrives Later

Revenue over the trailing twelve months was $66.6 billion, up 4.6% and in line with its own three-year pace. Profitability did not follow. Its operating margin over the same twelve months was 10.5%, versus a three-year average of 22.4%.

Most of that gap is one purchase. Merck took a $5.7 billion charge in the second quarter of 2026, about 9% of a year's sales. It bought Terns Pharmaceuticals, and with it MK-4208, a candidate for chronic myeloid leukemia. The bill hits earnings now and the medicine arrives later.

And Its Pipeline Started Proving Itself

The proof matters because of the risk hanging over this stock. The KEYTRUDA family was just over half of Merck's revenue in the second quarter of 2026. The company is openly planning for the end of that exclusivity when Keytruda loses primary U.S. patent protection in 2028. Management describes the stretch as more of a hill than a cliff, with a shallow dip and a fast return to growth.

Johnson & Johnson (JNJ) returned 56% over the same twelve months and Pfizer (PFE) 23%, so a good year for pharmaceuticals explains some of this but not Merck's lead. What separated Merck was evidence. The FDA approved LIPFENDRA, the first and only oral PCSK9 inhibitor. In the CORALreef Lipids trial it lowered LDL cholesterol by up to 60% when added to a statin.

Its TROP2 antibody-drug conjugate sac-TMT produced its first positive Phase III result, in endometrial cancer. Its anti-TL1A antibody tulisokibart met its primary endpoint in ulcerative colitis. The drugs already launched are selling: WINREVAIR grew 75% excluding currency in the second quarter of 2026.

So Are You Paying For Proof Or For Promises?

Both, and the mix is shifting. Management put more than $70 billion of commercial opportunity from over 20 new products on the record earlier in 2026. Proof points have arrived since, several of them earlier than management expected. Merck has also raised and narrowed its full-year 2026 revenue guidance, to between $66.3 billion and $67.3 billion-growth of just 2% to 4% (around 1% to 3% excluding currency), signaling a slight deceleration from its trailing 4.6% pace rather than an acceleration.

Not everything points up. Management expects U.S. KEYTRUDA growth to slow in the second half of 2026 as it nears peak use in several key indications. Merck has no cardiovascular outcomes data for LIPFENDRA yet, and the trial running now reads out in 2029.

So you are paying for a pipeline that has begun to deliver, at a price that moved far more than the business did. Whether that was worth it depends on the readouts ahead. The next is close: an FDA decision on a WINREVAIR label update from the HYPERION study lands September 21, 2026.

Will You Run This Investigation Every Time?

Working out why Merck nearly doubled meant reading trial results and management's own plans for KEYTRUDA. The next stock that jumps will have a different reason and take the same evening to find.

There is a way to stop deciding one name at a time. Since its inception, our rule-based High Quality Portfolio has outperformed its benchmark, a blend of three major indices.

Or keep judging them one by one, and our Guidance-Driven Momentum screen is where the raises show up first. Knowing why a stock moved is not knowing which one moves next.