Roche Holding AG (ROG) AI Stock Analysis

• Market Cap: $205.09B
• Dividend Yield: 3.79%
• Average Volume (3M): 863.60K
• Price to Earnings (P/E): 21.6
• Beta (1Y): 1.18
• Revenue Growth: 4.77%
• EPS Growth: -11.07%
• Country: CH
• Employees: 103,249
• Sector: Healthcare
• Sector Strength: 51
• Industry: Drug Manufacturers - General
• EPS (TTM): 11.08
• Shares Outstanding: 702,562,700
• 10 Day Avg. Volume: 1,115,717
• 30 Day Avg. Volume: 863,598
• PEG Ratio: -0.88
• Price to Book (P/B): 6.41
• Price to Sales (P/S): 3.26
• P/FCF Ratio: 13.50
• Enterprise Value/Market Cap: 1.14
• Enterprise Value/Revenue: 3.79
• Enterprise Value/Gross Profit: 5.12
• Enterprise Value/Ebitda: 14.11
• 1Y Price Target: $277.27
• Price Target Upside: 8.31% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 12

• Rating: 73 Outperform
• Price Target: CHF289.00 ▲(12.89% Upside)

Roche Holding AG's overall stock score is driven by strong earnings call performance and solid financial health, particularly in cash flow management. However, technical analysis indicates potential bearish momentum, and the valuation suggests the stock may be overvalued. The company's strategic advancements and robust pipeline development in pharmaceuticals are significant positives, while challenges in the Diagnostics segment and geopolitical uncertainties present risks.

Positive Factors

Pharma Investment

Roche announced a $50 billion investment in the US for Pharma and diagnostics over the next five years, including research and development sites and new manufacturing facilities.

Pharma Sales

Q2'25 sales beat consensus by 1%, driven by a stronger Pharmaceuticals (2% beat).

Product Performance

Phesgo was 19% above consensus accounting for 41% of the group sales beat on better demand in China and US.

Negative Factors

Competition

Longer-term growth appears challenged due to potential branded and biosimilar competition, which is likely to increase.

Market Challenges

A more challenging US market for Vabysmo drives FY25 sales growth closer to 18% YoY, compared to the pre-Q1 consensus of around 33% growth.

Regulatory Setbacks

Recent safety and regulatory setbacks for key new launches contribute to downside risk for earnings expectations.

Roche Holding AG Business Overview & Revenue Model

Company Description

Roche Holding AG engages in the pharmaceuticals and diagnostics businesses in Switzerland, Germany, the United States, Austria, Netherlands, the United Kingdom, France, Belgium, and internationally. The company offers pharmaceutical products for treating oncology, neuroscience, infectious, immunology, cardiovascular and metabolism, ophthalmology, and respiratory, as well as anemia, cancer, dermatology, hemophilia, inflammatory and autoimmune, neurological, and transplantation. It also offers in vitro tests for the diagnosis of various diseases, such as cancer, diabetes, Covid-19, hepatitis, human papillomavirus, and other diseases. In addition, the company supplies diagnostic instruments and reagents. The company was founded in 1896 and is headquartered in Basel, Switzerland.

How the Company Makes Money

Roche generates revenue primarily through the sale of prescription pharmaceuticals and diagnostic products. The Pharmaceuticals division is the largest contributor to revenue, with key products including monoclonal antibodies and targeted therapies that treat various cancers and chronic diseases. The Diagnostics division adds to the revenue through its extensive portfolio of laboratory instruments, reagents, and software solutions used in clinical diagnostics. Roche also benefits from strong partnerships with healthcare providers, research institutions, and collaborations with other biotech companies, enhancing its product offerings and market reach. Furthermore, the company invests heavily in R&D, which enables it to maintain a pipeline of innovative treatments that drive future revenue growth.

Roche Holding AG Financial Statement Overview

Summary

Roche Holding AG shows strong cash flow generation and stable income statement metrics, though declining net profit margin and ROE indicate potential pressures on profitability and efficiency. The balance sheet remains robust, with moderate leverage and improved equity financing.

Income Statement

Roche Holding AG's income statement shows a stable gross profit margin of approximately 74% for 2024. However, the net profit margin decreased from 19% in 2023 to 13% in 2024, indicating a reduction in profitability. Revenue growth was modest at 3.2% in 2024 compared to 2023, and EBIT margin also declined to 21.5% from 25.5% in 2023. EBITDA margin remains strong at 26.6% but has decreased from previous years. Overall, the company maintains strong profitability metrics, although there are signs of margin pressure.

Balance Sheet

The balance sheet reflects a debt-to-equity ratio of 1.14 in 2024, indicating moderate leverage. Return on equity stands at 26%, which is a decline from 39% in 2023, suggesting reduced efficiency in using equity to generate profits. Equity ratio improved to 31.2% from 32.4% in 2023, indicating a slight improvement in asset financing through equity. While the company remains financially stable, the decline in ROE is a concern.

Cash Flow

Roche's cash flow statement shows strong free cash flow generation with a growth rate of 31.8% in 2024. Operating cash flow to net income ratio is robust at 2.43, reflecting strong cash earnings relative to net income. Free cash flow to net income ratio also improved to 1.82, indicating efficient cash utilization. These metrics suggest excellent cash flow management despite the decline in net income.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	62.40B	60.44B	63.28B	62.80B	58.32B
Gross Profit	46.11B	44.08B	44.44B	43.10B	41.97B
EBITDA	16.62B	18.41B	20.80B	22.19B	22.97B
Net Income	8.28B	11.50B	12.42B	13.93B	14.29B
Balance Sheet
Total Assets	101.80B	90.47B	88.15B	92.32B	86.14B
Cash, Cash Equivalents and Short-Term Investments	17.32B	10.51B	9.77B	13.03B	12.33B
Total Debt	36.35B	30.78B	26.54B	32.55B	15.41B
Total Liabilities	65.64B	57.20B	56.14B	63.97B	46.37B
Stockholders Equity	31.77B	29.32B	27.99B	24.49B	36.34B
Cash Flow
Free Cash Flow	15.09B	11.45B	13.34B	16.02B	11.47B
Operating Cash Flow	20.09B	16.09B	17.89B	20.57B	18.16B
Investing Cash Flow	-11.39B	-10.64B	-3.57B	-6.55B	-9.08B
Financing Cash Flow	-6.82B	-4.24B	-15.72B	-12.70B	-9.24B

Roche Holding AG Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 256.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CH:ROG, the sentiment is Neutral. The current price of 256 is above the 20-day moving average (MA) of 254.56, below the 50-day MA of 258.51, and below the 200-day MA of 263.76, indicating a neutral trend. The MACD of -2.01 indicates Negative momentum. The RSI at 52.18 is Neutral, neither overbought nor oversold. The STOCH value of 79.79 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for CH:ROG.

Roche Holding AG Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NOVN	81 Outperform	CHF189.35B	16.64		3.49%	9.36%	-14.82%
ROG	73 Outperform	$205.09B	21.61	31.98%	3.79%	4.77%	-11.07%
GALD	71 Outperform	CHF31.36B	95.53		0.11%	6.22%	―
LONN	66 Neutral	CHF37.88B	52.32		0.72%	5.93%	29.83%
Sector *	60 Neutral	HK$19.37B	4.62	-4.00%	3.28%	11.14%	-17.52%
ALC	―	$43.63B	38.75	5.23%	0.38%	―	―
SDZXF	―	$26.11B	113.50	2.64%	―	―	―