Royalty Pharma PLC (RPRX)
NASDAQ:RPRX
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Royalty Pharma
(NASDAQ:RPRX)
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Rating:77Outperform
Price Target:
$58.00
▲(16.00% Upside)
Action:Reiterated
Date:05/09/26
The score is driven primarily by strong financial quality (high profitability and very strong free cash flow) and a constructive earnings update (raised full-year guidance and strong cash generation). Technicals add support with an uptrend across moving averages and positive MACD. The main offsets are leverage/interest cost considerations and the outlook headwinds highlighted on the call (milestone decline, LOE/biosimilar and policy uncertainty), while valuation confidence is limited due to an unusable P/E input.
Positive Factors
Strong cash generation
Royalty Pharma's very strong trailing twelve‑month operating and free cash flow (~$2.65B) provides durable internal funding for acquisitions, buybacks, and dividends. Persistent cash conversion supports capital deployment into new royalties and cushions earnings volatility inherent to lumpy biotech receipts.
Negative Factors
Milestone receipt decline
A forecasted ~53% decline in milestones shrinks a lumpy but high‑upside component of portfolio receipts, reducing near‑term upside optionality. Because milestone income is irregular, this drop increases reliance on recurring royalties and can mute growth and cash variability over the coming 2–6 months.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong cash generation
Royalty Pharma's very strong trailing twelve‑month operating and free cash flow (~$2.65B) provides durable internal funding for acquisitions, buybacks, and dividends. Persistent cash conversion supports capital deployment into new royalties and cushions earnings volatility inherent to lumpy biotech receipts.
Read all positive factors
Royalty Pharma Key Performance Indicators (KPIs)
Any
Portfolio Receipts
Tracks the income generated from the company's portfolio of royalty interests, highlighting cash flow stability and the effectiveness of its investment strategy in acquiring lucrative royalty streams.
Tracks the income generated from the company's portfolio of royalty interests, highlighting cash flow stability and the effectiveness of its investment strategy in acquiring lucrative royalty streams.
Data provided by:
The Fly
The FlyRoyalty Pharma (RPRX) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$31.39B
Dividend Yield2.23%
Average Volume (3M)3.40M
Price to Earnings (P/E)17.6
Beta (1Y)0.22
Revenue Growth7.79%
EPS Growth-22.14%
CountryUS
Employees75
SectorHealthcare
Sector Strength45
IndustryBiotechnology
Share Statistics
EPS (TTM)2.46
Shares Outstanding443,274,100
10 Day Avg. Volume3,544,012
30 Day Avg. Volume3,402,614
Financial Highlights & Ratios
PEG Ratio1.01
Price to Book (P/B)2.58
Price to Sales (P/S)7.02
P/FCF Ratio6.70
Enterprise Value/Market Cap1.01
Enterprise Value/Revenue13.03
Enterprise Value/Gross Profit13.04
Enterprise Value/Ebitda17.98
Forecast
1Y Price Target
$59.43Price Target Upside18.86% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering7
EPS Forecast (FY)5.13
Revenue Forecast (FY)$3.46B
Royalty Pharma Business Overview & Revenue Model
Company Description
Royalty Pharma plc operates as a buyer of biopharmaceutical royalties and a funder of innovations in the biopharmaceutical industry in the United States. It is also involved in the identification, evaluation, and acquisition of royalties on variou...
How the Company Makes Money
Royalty Pharma makes money primarily by collecting royalty and similar payments that are contractually based on the net sales of specific biopharmaceutical products. Its core revenue stream is “portfolio receipts” (cash inflows from its royalty in...
Royalty Pharma Earnings Call Summary
Earnings Call Date:May 06, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Aug 12, 2026
Earnings Call Sentiment Positive
The call was strongly positive: Royalty Pharma reported double-digit recurring revenue growth, attractive returns (ROIC ~14.1%, ROIE ~19.7%), robust cash generation ($722M portfolio cash flow), active capital deployment (>$0.5B) and strategic deal flow including R&D co-funding momentum (J&J and Teva deals) and high-impact clinical/regulatory wins (daraxonrasib, Avlayah, Myqorzo). Key risks highlighted were a material decline in milestone receipts (~53% drop), elevated interest expense timing, some market/policy headwinds (Promacta LOE, biosimilar Tysabri, MFN uncertainty) and optionality/execution risk in future co-funding tranches. Overall, the positive operating and balance-sheet trends and raised guidance outweigh the limited but meaningful risks discussed.Positive Updates
Top-line and Recurring Cash Flow Growth
Portfolio receipts grew 10% in Q1 and royalty receipts (recurring cash flows) grew 13% year-over-year, driven by strong performances from Tremfya, Voranigo and Evrysdi; the company absorbed a ~3% headwind from loss of exclusivity on Promacta and still delivered double-digit royalty growth.
Negative Updates
Decline in Milestones and Other Contractual Receipts
Significant year-over-year decline in milestones and other contractual receipts; expected drop from $128 million in 2025 to approximately $60 million in 2026 (a decline of ~53%), which weighed on portfolio receipts growth versus recurring royalties.
Read all updates
Q1-2026 Updates
Positive
Negative
Top-line and Recurring Cash Flow Growth
Portfolio receipts grew 10% in Q1 and royalty receipts (recurring cash flows) grew 13% year-over-year, driven by strong performances from Tremfya, Voranigo and Evrysdi; the company absorbed a ~3% headwind from loss of exclusivity on Promacta and still delivered double-digit royalty growth.
Read all positive updates
Company Guidance
Royalty Pharma raised its 2026 full‑year portfolio receipts guidance to $3.325–$3.45 billion (from $3.275–$3.425B), with royalty receipts expected to grow ~4%–8%; Q2 portfolio receipts are guided at $740–$760 million. Management expects milestones and other contractual receipts to decline from $128 million in 2025 to roughly $60 million in 2026, operating and professional costs to run about 5.5%–6.5% of portfolio receipts (Q1 was 3.9%), and interest paid to be ~$350–$360 million for the year (with ≈$175M due in Q3 and de minimis in Q2 and Q4); interest received (not included) was $6M in Q1. Q1 portfolio cash flow (adjusted EBITDA less net interest) was $722M, net interest paid was $167M, net margin ~78%, capital deployed in Q1 was $528M and the company returned ≈$186M to shareholders (including $50M of buybacks for 1M shares and a 7% dividend increase). On the balance sheet, cash and equivalents were $586M at March 31, investment‑grade debt outstanding was $9.2B with a ~12‑year weighted average duration, Fitch upgraded the rating to BBB (from BBB‑), leverage stood at 2.9x total debt/adjusted EBITDA (2.7x net), the $1.8B revolver is undrawn, and management cites roughly $4 billion of total financial flexibility.Royalty Pharma Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
62
Positive
Cash Flow
88
Very Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.44B | 2.38B | 2.26B | 2.35B | 2.24B | 2.29B |
| Gross Profit | 2.44B | 2.38B | 2.26B | 2.35B | 2.24B | 2.29B |
| EBITDA | 1.77B | 1.64B | 1.56B | 1.89B | 423.69M | 1.43B |
| Net Income | 827.60M | 770.95M | 858.98M | 1.13B | 42.83M | 619.73M |
Balance Sheet | ||||||
| Total Assets | 19.82B | 19.62B | 18.22B | 16.38B | 16.81B | 17.52B |
| Cash, Cash Equivalents and Short-Term Investments | 608.29M | 637.50M | 1.77B | 1.23B | 2.43B | 2.80B |
| Total Debt | 8.96B | 8.95B | 7.61B | 6.14B | 7.12B | 7.10B |
| Total Liabilities | 9.88B | 9.91B | 7.88B | 6.30B | 7.29B | 7.27B |
| Stockholders Equity | 6.89B | 6.48B | 6.95B | 6.53B | 5.63B | 5.78B |
Cash Flow | ||||||
| Free Cash Flow | 2.65B | 2.49B | 2.77B | 2.99B | 2.14B | 2.02B |
| Operating Cash Flow | 2.65B | 2.49B | 2.77B | 2.99B | 2.14B | 2.02B |
| Investing Cash Flow | -2.64B | -1.61B | -2.68B | -2.07B | -1.03B | -1.87B |
| Financing Cash Flow | -517.34M | -1.19B | 361.14M | -2.15B | -944.86M | 385.11M |
Royalty Pharma Technical Analysis
Positive
50.00
Price Trends
48.95
Positive
45.79
Positive
41.31
Positive
Market Momentum
1.38
Negative
75.33
Negative
93.69
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RPRX, the sentiment is Positive. The current price of 50 is below the 20-day moving average (MA) of 51.29, above the 50-day MA of 48.95, and above the 200-day MA of 41.31, indicating a bullish trend. The MACD of 1.38 indicates Negative momentum. The RSI at 75.33 is Negative, neither overbought nor oversold. The STOCH value of 93.69 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for RPRX.
Royalty Pharma Risk Analysis
Royalty Pharma disclosed 58 risk factors in its most recent earnings report. Royalty Pharma reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Royalty Pharma Peers Comparison
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $19.41B | 15.46 | 29.31% | ― | 21.48% | 1853.63% | |
79 Outperform | $24.13B | 23.46 | 19.24% | ― | 5.87% | 8.18% | |
77 Outperform | $31.39B | 17.56 | 12.67% | 2.23% | 7.79% | -22.14% | |
63 Neutral | $16.03B | 77.40 | 20.51% | ― | 21.02% | -24.83% | |
62 Neutral | $15.41B | 4.77 | -5641.90% | ― | 155.14% | ― | |
55 Neutral | $23.30B | -8.99 | -6.67% | ― | 10.01% | -71.78% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% |
* Healthcare Sector Average
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Royalty Pharma Corporate Events
Business Operations and StrategyPrivate Placements and FinancingProduct-Related Announcements
Royalty Pharma Expands Daraxonrasib Royalty Stake After Milestone
Positive
Apr 13, 2026
On April 13, 2026, Revolution Medicines reported positive Phase 3 results for its RAS(ON) inhibitor daraxonrasib in previously treated metastatic pancreatic cancer, fulfilling primary and key secondary endpoints and supporting planned global regul...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.