Roche Holding (RHHBY) AI Stock Analysis

• Market Cap: $286.51B
• Dividend Yield: 3.01%
• Average Volume (3M): 1.40M
• Price to Earnings (P/E): 26.1
• Beta (1Y): 0.37
• Revenue Growth: 7.26%
• EPS Growth: -8.64%
• Country: US
• Employees: 103,249
• Sector: Healthcare
• Sector Strength: 45
• Industry: Drug Manufacturers - General
• EPS (TTM): 1.74
• Shares Outstanding: 5,620,501,500
• 10 Day Avg. Volume: 1,527,264
• 30 Day Avg. Volume: 1,400,562
• PEG Ratio: -0.88
• Price to Book (P/B): 6.35
• Price to Sales (P/S): 3.24
• P/FCF Ratio: 13.38
• Enterprise Value/Market Cap: 1.03
• Enterprise Value/Revenue: 6.31
• Enterprise Value/Gross Profit: 8.58
• Enterprise Value/Ebitda: 23.49
• 1Y Price Target: $44.80
• Price Target Upside: -1.10% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 5

• Rating: 75 Outperform
• Price Target: $47.00 ▲(3.75% Upside)

Roche Holding's strong financial performance and positive earnings call are the most significant factors contributing to the overall score. The company shows robust sales growth and strategic advancements, particularly in the Pharmaceuticals division. While technical indicators are neutral, the valuation remains balanced, supporting a solid investment case.

Positive Factors

Pharmaceutical Sales Growth

The significant growth in pharmaceutical sales indicates strong demand and market position, particularly in oncology and neurology, supporting long-term revenue expansion.

Pipeline Advancements

Advancements in the drug pipeline, including promising Phase III trials, suggest potential for future product launches and sustained innovation, enhancing competitive advantage.

Cash Flow Strength

Strong cash flow generation supports operational flexibility and strategic investments, ensuring the company can capitalize on growth opportunities and manage financial obligations.

Negative Factors

Diagnostics Division Challenges

Pricing reforms in China have impacted the Diagnostics division, potentially limiting growth and profitability in a key market, requiring strategic adjustments to mitigate long-term effects.

Rising Debt Levels

Increased leverage could strain financial resources and limit flexibility, necessitating careful management to avoid impacting long-term financial health and investment capacity.

Decline in Profitability

The decline in profitability metrics suggests challenges in maintaining cost efficiency and pricing power, which could impact long-term earnings potential and shareholder returns.

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 generates revenue primarily through the sale of its pharmaceutical products, which include innovative and established medicines. The company earns significant income from its oncology drugs, such as Avastin, Herceptin, and Rituxan. Additionally, Roche's Diagnostics division contributes substantially to its revenue through the sales of diagnostic instruments and tests, including those used for cancer detection and management. The company also engages in strategic partnerships and collaborations with other pharmaceutical and biotech firms, enhancing its research capabilities and market reach. Furthermore, Roche benefits from a strong pipeline of drugs in development, which promises future revenue growth as these products receive regulatory approval and enter the market.

Roche Holding Financial Statement Overview

Summary

Roche Holding demonstrates strong operational performance with consistent revenue growth and a solid balance sheet. Despite a decline in net income and profitability metrics, the company maintains strong cash flows and manageable leverage.

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	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	46.57B	62.40B	60.44B	65.81B	62.80B	58.32B
Gross Profit	34.25B	46.11B	44.84B	44.44B	43.10B	41.97B
EBITDA	12.50B	16.62B	18.41B	20.80B	22.19B	22.97B
Net Income	5.72B	8.28B	11.50B	12.42B	13.93B	14.29B
Balance Sheet
Total Assets	94.77B	101.80B	90.47B	88.15B	92.32B	86.14B
Cash, Cash Equivalents and Short-Term Investments	12.03B	17.32B	10.51B	9.77B	13.03B	12.33B
Total Debt	33.03B	36.35B	30.78B	26.54B	32.55B	15.41B
Total Liabilities	61.72B	65.64B	57.20B	56.14B	63.97B	46.37B
Stockholders Equity	28.68B	31.77B	29.32B	27.99B	24.49B	36.34B
Cash Flow
Free Cash Flow	12.59B	15.09B	11.45B	13.34B	16.02B	11.47B
Operating Cash Flow	15.23B	20.09B	16.09B	17.89B	20.57B	18.16B
Investing Cash Flow	-7.74B	-11.39B	-10.64B	-3.57B	-6.55B	-9.08B
Financing Cash Flow	-4.81B	-6.82B	-4.24B	-15.72B	-12.70B	-9.24B

Roche Holding Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 45.30
• 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 45.3 is above the 20-day moving average (MA) of 41.91, above the 50-day MA of 40.77, and above the 200-day MA of 39.66, indicating a bullish trend. The MACD of 0.75 indicates Negative momentum. The RSI at 68.94 is Neutral, neither overbought nor oversold. The STOCH value of 95.34 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	78 Outperform	$248.84B	18.84	32.82%	3.02%	12.38%	-12.67%
AZN	77 Outperform	$266.11B	31.78	19.76%	1.83%	15.08%	29.15%
MRK	76 Outperform	$223.58B	13.80	35.44%	3.63%	2.00%	20.01%
RHHBY	75 Outperform	$286.51B	26.09	31.98%	3.01%	7.26%	-8.64%
SNY	75 Outperform	$124.25B	12.66	8.39%	4.35%	-9.32%	120.62%
GILD	68 Neutral	$137.18B	21.99	33.26%	2.79%	3.69%	501.26%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%