Roche Holding (RHHBY) AI Stock Analysis

• Market Cap: $263.05B
• Dividend Yield: 2.1%
• Average Volume (3M): 3.00M
• Price to Earnings (P/E): 27.7
• Beta (1Y): 0.38
• Revenue Growth: 5.15%
• EPS Growth: -26.52%
• Country: US
• Employees: 103,249
• Sector: Healthcare
• Sector Strength: 70
• Industry: Drug Manufacturers - General
• EPS (TTM): 1.47
• Shares Outstanding: 5,620,501,500
• 10 Day Avg. Volume: 2,245,343
• 30 Day Avg. Volume: 2,998,416
• PEG Ratio: 18.00
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• 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: $42.67
• Price Target Upside: 4.66% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 3

Roche Holding's strong financial position and positive earnings call outlook are significant strengths. However, the stock's high valuation and technical indicators suggesting overbought conditions slightly temper the overall score. The company's strategic focus on pipeline development and sales growth is encouraging, despite challenges in net income and specific markets.

Positive Factors

Clinical Trial Results

Trontinemab showed roughly double the amyloid clearance as competitors while delivering lower ARIA rates.

Drug Efficacy

Gazyva showed potential best-in-class profile in lupus nephritis and is likely to be the starter therapy of choice versus GSK's Benlysta.

Financial Performance

Roche's model was updated and numbers raised post recent business trends, with 2023-30 sales and EPS growth estimates increased.

Negative Factors

Placebo Effect

The high placebo response rate in males was notable, where placebo achieved a 66.7% complete renal response compared to 42.9% for Gazyva.

Safety Concerns

There was a case of fatal cerebral macrohemorrhage in Part 2, leading to updated trial criteria to exclude patients with superficial siderosis.

Roche Holding 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 Holding generates revenue primarily through two main divisions: Pharmaceuticals and Diagnostics. The Pharmaceuticals Division, which accounts for the majority of Roche's revenue, involves the discovery, development, and marketing of prescription medicines, particularly in the areas of oncology, immunology, and infectious diseases. Key products include biologic drugs, personalized medicine, and biosimilars. The Diagnostics Division earns revenue by offering a wide range of diagnostic tests and systems, including in-vitro diagnostics, molecular diagnostics, and tissue diagnostics, which are critical in disease detection and monitoring. Roche also engages in strategic partnerships and collaborations with other biotech and pharmaceutical companies, enhancing its product pipeline and expanding its market reach. Additionally, Roche invests heavily in research and development to maintain its leadership in innovation and to bring new therapies and diagnostic tools to market.

Roche Holding Financial Statement Overview

Summary

Roche Holding shows stable financial performance with robust revenue growth and strong cash flows. However, declining net income and return on equity, along with increased leverage, pose challenges to its financial health.

Income Statement

Roche Holding has shown consistent revenue growth with a compound annual growth rate of approximately 1.33% over the past five years. The gross profit margin is strong, averaging around 72.5%, indicating efficient cost management. However, there has been a decline in net income, leading to a reduced net profit margin from 24.5% in 2020 to 13.3% in 2024. EBIT and EBITDA margins have been stable but slightly declining, which could indicate pressure on operational efficiency.

Balance Sheet

The company's equity ratio is solid at around 31.2%, reflecting a stable capital structure. The debt-to-equity ratio has increased due to rising total debt, but it remains manageable at approximately 1.14 in 2024. Return on equity has decreased from 39.4% in 2020 to 26.1% in 2024, suggesting a decline in profitability relative to shareholder equity. The balance sheet remains robust, but the increase in leverage warrants monitoring.

Cash Flow

Roche Holding's operating cash flow is strong, and the company maintains a healthy free cash flow to net income ratio, indicating efficient cash conversion. Free cash flow growth has been positive, but the growth rate has slowed, suggesting potential challenges in maintaining past growth levels. The operating cash flow to net income ratio is above 2, demonstrating strong cash generation capabilities relative to earnings.

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	42.88B	43.15B	42.15B
	EBIT
13.42B	15.39B	17.48B	18.16B	18.54B
	EBITDA
16.62B	18.41B	20.86B	22.86B	23.08B
	Net Income Common Stockholders
8.28B	11.50B	12.42B	13.93B	14.29B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
17.32B	10.51B	9.77B	13.03B	12.33B
	Total Assets
101.80B	90.47B	88.15B	92.32B	86.14B
	Total Debt
36.35B	30.78B	26.54B	32.55B	15.41B
	Net Debt
29.38B	25.41B	21.55B	25.70B	9.68B
	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	13.86B	16.43B	11.88B
	Operating Cash Flow
20.09B	16.09B	18.41B	20.98B	18.57B
	Investing Cash Flow
-11.39B	-10.64B	-3.54B	-6.55B	-9.07B
	Financing Cash Flow
-6.82B	-4.24B	-16.27B	-13.11B	-9.67B

Roche Holding Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 40.77
• 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 RHHBY, the sentiment is Positive. The current price of 40.77 is above the 20-day moving average (MA) of 38.67, above the 50-day MA of 40.49, and above the 200-day MA of 38.38, indicating a bullish trend. The MACD of 0.03 indicates Negative momentum. The RSI at 58.99 is Neutral, neither overbought nor oversold. The STOCH value of 89.06 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for RHHBY.

Roche Holding Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NVS	81 Outperform	$215.95B	19.04	26.33%	2.89%	6.30%	-13.28%
JNJ	80 Outperform	$371.98B	26.66	29.45%	3.18%	-0.37%	29.21%
AZN	77 Outperform	$219.09B	30.81	19.81%	2.18%	15.48%	22.70%
RHHBY	73 Outperform	$263.05B	27.66	26.76%	2.10%	5.15%	-26.52%
MRK	73 Outperform	$214.40B	12.40	40.81%	3.73%	4.26%	―
SNY	71 Outperform	$125.03B	21.43	7.34%	2.75%	-4.57%	2.96%
Sector *	52 Neutral	$5.38B	3.59	-41.63%	2.87%	17.72%	1.87%