Roche Holding AG (ROG) AI Stock Analysis

• Market Cap: CHF257.69B
• Dividend Yield: 2.94%
• Average Volume (3M): 1.25M
• Price to Earnings (P/E): 11.9
• Beta (1Y): 1.28
• 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: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: CHF348.30
• Price Target Upside: 8.61% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 12
• EPS Forecast (FY): 20.16
• Revenue Forecast (FY): CHF62.80B

• Rating: 73 Outperform
• Price Target: CHF355.00 ▲(10.70% Upside)
• Action: Reiterated Date: 03/01/26
• Date: Action: Reiterated 03/01/26

The score is driven primarily by strong underlying profitability and healthy free cash flow, supported by an established upward technical trend. The main constraints are uneven recent growth/margin volatility and a valuation that is not particularly cheap despite the moderate dividend yield.

Positive Factors

High margins & earnings power

Sustained high gross and net margins indicate durable earnings power across Roche’s pharma and diagnostics franchises. High margins support ongoing R&D and capital allocation, provide buffer versus pricing pressure and underpin predictable cash generation over multi-quarter horizons.

Robust free cash flow

Consistently strong FCF (roughly 71%–79% of net income) provides durable funding for dividends, R&D and selective M&A without eroding balance-sheet strength. Reliable cash conversion supports long-term investment and financial flexibility despite cyclical pressures.

Diversified pharma + diagnostics model

A two-pronged model—high-margin patented drugs plus recurring consumables from installed diagnostic systems—creates complementary revenue streams. Installed-base driven consumables smooth revenue and reduce cyclicality, strengthening structural resilience over years.

Negative Factors

Volatile revenue growth

Large swings in top-line growth reflect lumpy product cycles, patent cliffs or one-off factors that complicate forecasting and resource planning. Persistent revenue volatility raises execution risk for multi-year R&D and commercialization commitments.

Material absolute debt

Although leverage has improved, the sizeable debt stock limits financial headroom for large inorganic moves or aggressive shareholder returns during downturns. Interest cost exposure and refinancing needs remain relevant risks for long-term capital allocation choices.

Cash conversion friction

OCF covering a modest fraction of EBIT signals working-capital or collection/inventory lags versus accounting profitability. Persistent cash conversion gaps can constrain near-term liquidity management and force reliance on FCF timing or capital markets for large expenditures.

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 makes money mainly by selling healthcare products through its Pharmaceuticals and Diagnostics divisions. In Pharmaceuticals, revenue is generated from the sale of patented prescription medicines to hospitals, clinics, pharmacies, and government/insurance-backed healthcare systems, as well as through specialty-care channels; earnings depend on product demand in major therapeutic areas, pricing and reimbursement decisions, and the lifecycle of each medicine (including competition from biosimilars/generics after loss of exclusivity). Roche also generates pharmaceutical-related income from collaborations and licensing arrangements (such as co-development/co-promotion deals, out-licensing of rights, and royalties), and may receive milestone payments where applicable; if specific terms or counterparties are not publicly disclosed in a given context, they are null. In Diagnostics, revenue comes from selling diagnostic instruments/analyzers and, importantly, recurring sales of consumables (test kits, reagents, and other assay materials) used on those installed systems, plus revenue from laboratory automation and software/services tied to diagnostic workflows. Profitability and growth are influenced by the installed base of instruments (which drives repeat consumables demand), menu expansion (new assays), healthcare testing volumes, regulatory approvals, tendering/procurement dynamics, and currency movements given Roche’s global sales footprint. Significant partnerships or factors contributing to earnings beyond the general categories described above: null.

Roche Holding AG Financial Statement Overview

Summary

Strong profitability (gross margins ~69%–74%) and solid cash generation (FCF 14.1B in 2025) support a high-quality profile. Offsetting factors include volatile revenue growth and a notable 2024 margin dip before the 2025 rebound, plus only moderate balance-sheet strength despite improving leverage.

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	45.23B	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	33.19B	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: Neutral
• Last Price: 320.70
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

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 320.7 is below the 20-day moving average (MA) of 344.74, below the 50-day MA of 340.30, and above the 200-day MA of 285.27, indicating a neutral trend. The MACD of -5.93 indicates Positive momentum. The RSI at 33.41 is Neutral, neither overbought nor oversold. The STOCH value of 8.06 is Positive, 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	78 Outperform	CHF231.13B	18.30	―	3.18%	7.62%	-18.33%
ROG	73 Outperform	CHF257.69B	11.94	31.98%	2.94%	4.77%	-11.07%
ALC	72 Outperform	CHF30.56B	38.35	4.44%	0.44%	0.39%	-12.46%
SDZ	66 Neutral	CHF27.57B	32.85	2.64%	1.02%	―	―
GALD	63 Neutral	CHF34.12B	52.90	―	0.09%	6.22%	―
LONN	56 Neutral	CHF32.87B	19.54	―	0.75%	5.93%	29.83%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%