Teva Pharmaceutical Industries Limited’s (TEVA Quick QuoteTEVA - Free Report) stock has risen 102.8% in the past year, fueled by strong revenue and earnings growth, robust cash-flow generation, improving operational execution and management’s successful implementation of its “Pivot to Growth” strategy. Investor sentiment has also improved as the company’s long-term growth outlook has strengthened. However, Teva still faces several risks and operational challenges.

Let’s take a closer look at Teva’s key strengths and weaknesses to better assess how investors should approach the stock amid its improving fundamentals.

TEVA’s New Branded Drugs Driving Growth

The company is seeing continued market share growth of its newest branded drugs, Austedo, Ajovy and Uzedy. Collectively, sales of Austedo, Ajovy and Uzedy rose 41% year over year to $838 million in the first quarter of 2026.

Austedo global sales rose 41% to $578 million in the first quarter. Teva expects Austedo annual revenues to be more than $2.5 billion by 2027 and exceed $3 billion by 2030. The Austedo franchise got a boost from the launch of Austedo XR, a new once-daily formulation of Austedo. Teva launched Austedo in European markets in 2026.

Ajovy global revenues rose 35% (constant currency) year over year to $196.0 million in the first quarter. Although Teva is experiencing slightly slower growth of Ajovy in the U.S. market, it anticipates sales to benefit from continued patient growth and launches in additional countries in Europe and international markets.

In the first quarter of 2026, Uzedy revenues rose 62% to $63 million, with total sales expected to be between $250 million and 280 million in 2026.

The company has also made decent progress with its branded pipeline, which includes olanzapine, a long-acting subcutaneous injectable (LAI) for treating schizophrenia and duvakitug, its anti-TL1A therapy for inflammatory bowel diseases (IBD), ulcerative colitis (UC) and Crohn’s disease (CD). Teva has partnered with Sanofi (SNY Quick QuoteSNY - Free Report) for duvakitug to maximize the value of the asset. Teva and Sanofi will equally share the development costs globally. While olanzapine LAI is under review in the United States and the EU, Sanofi is conducting phase III studies on duvakitug.

In April, Teva announced a definitive agreement to acquire Emalex, including its lead asset, ecopipam. Ecopipam is a late-stage, first-in-class therapy for pediatric Tourette syndrome, which is a natural fit for Teva’s CNS franchise.

In 2022, only about 9% of Teva’s revenues came from its branded drugs, which has now increased to more than 20%. Teva anticipates generating more than $5 billion in revenues from its branded products by 2030.

TEVA’s Strengthening Generics and Biosimilar Pipeline

Biosimilars are becoming an increasingly important growth contributor for Teva, alongside new product launches in generics.

Over the past few quarters, Teva has successfully launched several biosimilars and other high-value complex generics, including Novo Nordisk’s (NVO Quick QuoteNVO - Free Report) Victoza, Roche’s cancer drugs Rituxan (Truxima) and Herceptin (Herzuma), AbbVie’s Humira (Simlandi), J&J’s Stelara (Selarsdi), Novartis’ Sandostatin LAR, AstraZeneca’s Soliris (Epysqli) and Novo Nordisk’s Saxenda.

Teva has a decent pipeline of biosimilars, with some being developed in partnership with Alvotech, including high-value complex generics, like Simlandi and Selarsdiand generic versions of Regeneron’s Eylea and J&J’s Simponi, which are under review in the United States. In partnership with mAbxience, Teva is developing oncology biosimilars, TEV-‘316 and TEV-‘333.

Teva’s U.S. generics/biosimilars business looks stable now, despite headwinds, much more than it has been in years. Though Teva’s global generics business was flat in 2025 from 2024 levels, the company expects its global generics business to improve going forward, driven by complex generic launches in the United States, several generic launches in ex-U.S. markets, and new biosimilar launches. In 2026, Teva expects its global generics business to rise in a low single-digit range despite the loss of revenues from the generic version of Bristol-Myers’ (BMY Quick QuoteBMY - Free Report) Revlimid.

The company expects that its biosimilars business will deliver $800 million in revenues by 2027. Teva launched three biosimilars, Simlandi, Selarsdi and Epysqli in the United States in 2025 and expects four additional launches by 2027 and nine more after 2028.

Generic Revlimid Hurting Teva’s Growth in 2026

Teva’s generics business was slightly soft in 2025 due to tough year-over-year comparables, increased competitive pressure and softness in certain markets. Its generics sales were flat in 2025. In International Markets, generics sales are being hurt by the divestment of Teva’s business venture in Japan. In the first quarter of 2026, Teva’s global generics revenues decreased by 16% mainly due to lower sales of Revlimid generic. Teva faces a revenue cliff for generic Revlimid in 2026 due to increased competition in the United States.

TEVA’s Price, Valuation & Estimate Discussion

Teva stock has risen 9% so far this year against the industry’s 0.4% decrease.

TEVA Stock Outperforms Industry YTD

Image Source: Zacks Investment Research

The stock is trading at an attractive valuation relative to the industry. Going by the price/earnings ratio, the company shares currently trade at 12.60 on a forward 12-month basis, lower than 15.20 for the industry. However, the stock is trading above its 5-year mean of 4.52.

TEVA Stock Valuation

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for earnings has declined from $2.69 per share to $2.50 per share for 2026 over the past 30 days and from $3.15 per share to $3.14 per share for 2027.

Estimate Movement for TEVA

Image Source: Zacks Investment Research

Stay Invested in Teva’s Stock

Teva faces its share of challenges, like a heavy debt burden, pricing pressure and intense competition in the generics business, litigation and legal overhangs, and geopolitical instability in the Middle East. However, it is successfully transitioning from a pure-play generics company to a more diversified biopharma company. Teva’s biggest growth driver is now its higher-margin branded/innovative drugs business rather than traditional generics.

Teva’s newer drugs, Austedo, Uzedy and Ajovy, are showing strong top-line growth and are contributing a much larger share of revenues. Although sales of the Generics unit has been slightly soft since 2025, the company is experiencing strong performance from biosimilars and new generic products.

Teva has several key pipeline assets in neuroscience and immunology, which the company believes represent a multi-billion-dollar commercial opportunity.

The company’s margins have been expanding while it has steadily reduced debt. The company expects net savings of approximately $700 million by 2027 from its restructuring and cost savings initiatives. Management is targeting a 30% adjusted operating margin by 2027. In 2025, Fitch, Moody's and S&P upgraded their respective credit outlook for Teva, reflecting improved growth prospects.

TEVA’s recent stock price appreciation, attractive valuation, improving branded and biosimilar pipeline and the prospect of growth in sales and profits are good enough reasons to stay invested in this Zacks Rank #3 (Hold) stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.