Roche Holding AG (ROG) AI Stock Analysis

• Market Cap: $294.84B
• Dividend Yield: 2.94%
• Average Volume (3M): 1.25M
• Price to Earnings (P/E): 22.8
• Beta (1Y): 1.29
• Revenue Growth: 4.77%
• EPS Growth: -11.07%
• Country: CH
• Employees: 103,249
• Sector: Healthcare
• Sector Strength: 45
• Industry: Drug Manufacturers - General
• EPS (TTM): 8.38
• Shares Outstanding: 702,562,700
• 10 Day Avg. Volume: 1,308,571
• 30 Day Avg. Volume: 1,251,256
• PEG Ratio: 0.36
• Price to Book (P/B): 7.73
• Price to Sales (P/S): 4.25
• P/FCF Ratio: 18.55
• Enterprise Value/Market Cap: 1.08
• Enterprise Value/Revenue: 5.18
• Enterprise Value/Gross Profit: 7.11
• Enterprise Value/Ebitda: 14.07
• 1Y Price Target: $344.56
• Price Target Upside: -6.32% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 12
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 77 Outperform
• Price Target: CHF398.00 ▲(8.21% Upside)

The score is driven primarily by strong financial quality (high margins and solid free cash flow) and bullish technical momentum (price above major moving averages with positive MACD). This is tempered by only moderate valuation (P/E 21.8, ~2.77% yield) and earnings-call risks including Diagnostics pressure in China and a meaningful FDA regulatory setback, despite solid growth and guidance.

Positive Factors

Free cash flow strength

Sustained, high free cash flow generation gives Roche durable financial flexibility to fund R&D, absorb patent expiries, pay dividends and pursue strategic deals. Strong cash conversion reduces refinancing risk and supports long‑term pipeline investment even amid margin pressure.

Pharmaceutical revenue momentum

Consistent double‑digit growth in the Pharmaceuticals division demonstrates entrenched market demand and successful commercialization of key drugs. Durable pharma momentum underpins predictable revenue streams and funds further clinical development and lifecycle management.

Advancing late‑stage pipeline

Multiple assets entering Phase III materially increase the probability of future approvals and revenue replacement for expiring brands. A deep pipeline reduces single‑asset dependency and, if successful, sustains long‑term growth and competitive positioning in oncology and neurology.

Negative Factors

Declining profitability metrics

A marked drop in net margin and operating margins signals structural pressure on profitability from cost or pricing dynamics. Persistently lower margins erode cash generation per sales dollar and constrain funds available for R&D and strategic initiatives over the medium term.

Diagnostics exposure to China reforms

Material exposure to Chinese healthcare pricing reforms creates persistent top‑line volatility in Diagnostics. If pricing pressure endures, it could limit segment recovery, reduce cross‑subsidies to pharma R&D, and necessitate structural cost or portfolio adjustments.

Regulatory and clinical setbacks

Regulatory refusals and mixed trial outcomes increase development risk and can delay or derail revenue streams from late‑stage assets. Such setbacks raise the probability of additional R&D spend, reprioritization, and potential missed timelines, affecting long‑term growth trajectories.

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 two key segments: Pharmaceuticals and Diagnostics. The Pharmaceutical division, which accounts for the majority of the company's income, focuses on the development and sale of prescription drugs, particularly in oncology, where it holds a leading position with products like Avastin and Herceptin. The Diagnostics division provides a wide range of products, including laboratory tests, point-of-care testing solutions, and tissue-based cancer diagnostics. Revenue is further bolstered by strategic partnerships and collaborations with other biotech firms and research institutions, allowing Roche to expand its product offerings and access new markets. The company also invests heavily in research and development to innovate and maintain a robust pipeline of new therapies, which is crucial for sustaining long-term revenue growth.

Roche Holding AG Financial Statement Overview

Summary

Strong profitability and cash generation support the score: gross margins remain high (~69%–74%) and free cash flow is healthy (14.1B in 2025) with good earnings quality. Offsetting factors include uneven revenue growth and a notable net-margin dip in 2024, plus a balance sheet that is improving but still carries meaningful debt.

Income Statement

Roche shows strong, resilient profitability with consistently high gross margins (~69%–74%) and healthy net margins (generally ~19%–25%, dipping to ~13% in 2024 before rebounding to ~21% in 2025). Reported revenue growth has been volatile (declines in 2020 and 2023, near-flat 2024, then a sharp +32% in 2025), suggesting uneven top-line momentum. Overall, earnings power looks solid, but the swing in growth and the 2024 margin compression temper the score.

Balance Sheet

Leverage is moderate and has improved recently, with debt-to-equity moving from a higher range (about 1.33 in 2021 and ~1.14 in 2024) down to ~0.94 in 2025, supported by rising equity. Total debt remains sizable (~31.6B in 2025), so balance-sheet risk is not negligible, but the trajectory is constructive versus prior years. Overall balance-sheet strength is adequate for a large pharma company, though not exceptionally conservative.

Cash Flow

Cash generation is strong and consistent: operating cash flow is robust (about 16.1B–20.6B historically; 17.8B in 2025) and free cash flow is healthy (14.1B in 2025) with an 11.9% increase in 2025 after a solid 2024. Free cash flow runs at roughly 71%–79% of net income, indicating good earnings quality. The main weakness is that operating cash flow covers only about ~0.54–0.74 of EBIT across the period (0.64 in 2025), implying working-capital or cash conversion friction versus operating profit.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	61.52B	62.40B	60.44B	65.81B	62.80B
Gross Profit	44.87B	46.11B	44.08B	47.88B	43.10B
EBITDA	22.66B	16.62B	18.41B	20.80B	22.19B
Net Income	12.88B	8.28B	11.50B	12.42B	13.93B
Balance Sheet
Total Assets	100.70B	101.80B	90.47B	88.15B	92.32B
Cash, Cash Equivalents and Short-Term Investments	15.48B	17.32B	10.51B	9.77B	13.03B
Total Debt	34.44B	36.35B	30.78B	26.54B	32.55B
Total Liabilities	62.82B	65.64B	57.20B	56.14B	63.97B
Stockholders Equity	33.80B	31.77B	29.32B	27.99B	24.49B
Cash Flow
Free Cash Flow	14.08B	15.09B	11.45B	13.34B	16.02B
Operating Cash Flow	17.83B	20.09B	16.09B	17.89B	20.57B
Investing Cash Flow	-8.71B	-11.39B	-10.64B	-3.57B	-6.55B
Financing Cash Flow	-10.18B	-6.82B	-4.24B	-15.72B	-12.70B

Roche Holding AG Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 367.80
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CH:ROG, the sentiment is Positive. The current price of 367.8 is above the 20-day moving average (MA) of 356.82, above the 50-day MA of 341.63, and above the 200-day MA of 287.23, indicating a bullish trend. The MACD of 7.62 indicates Negative momentum. The RSI at 68.65 is Neutral, neither overbought nor oversold. The STOCH value of 84.85 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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	78 Outperform	CHF242.43B	21.27	―	3.18%	7.62%	-18.33%
ROG	77 Outperform	$294.84B	22.82	31.98%	2.94%	4.77%	-11.07%
ALC	75 Outperform	$31.50B	34.68	4.82%	0.44%	0.39%	-12.46%
GALD	70 Outperform	CHF36.66B	112.98	―	0.09%	6.22%	―
SDZ	59 Neutral	$29.34B	148.71	2.64%	1.02%	―	―
LONN	56 Neutral	CHF36.32B	39.34	―	0.75%	5.93%	29.83%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%