Royalty Pharma (RPRX) AI Stock Analysis

• Market Cap: $22.28B
• Dividend Yield: 2.28%
• Average Volume (3M): 4.56M
• Price to Earnings (P/E): 22.1
• Beta (1Y): 0.20
• Revenue Growth: 3.72%
• EPS Growth: -31.46%
• Country: US
• Employees: 75
• Sector: Healthcare
• Sector Strength: 45
• Industry: Biotechnology
• EPS (TTM): 1.17
• Shares Outstanding: 427,247,500
• 10 Day Avg. Volume: 5,569,229
• 30 Day Avg. Volume: 4,557,637
• PEG Ratio: -0.55
• Price to Book (P/B): 1.64
• Price to Sales (P/S): 5.03
• P/FCF Ratio: 4.11
• Enterprise Value/Market Cap: 1.39
• Enterprise Value/Revenue: 13.17
• Enterprise Value/Gross Profit: 13.17
• Enterprise Value/Ebitda: 19.55
• 1Y Price Target: $46.00
• Price Target Upside: 19.17% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4
• EPS Forecast (FY): 4.56
• Revenue Forecast (FY): $2.99B

• Rating: 79 Outperform
• Price Target: $44.00 ▲(13.99% Upside)

Royalty Pharma's strong financial performance and positive earnings call are the most significant factors driving the stock's score. The company's robust profitability, strategic acquisitions, and raised guidance underscore its growth potential. While technical analysis and valuation suggest a stable outlook, the strategic corporate event further enhances its financial position. Overall, the stock is well-positioned for future growth in the biotechnology industry.

Positive Factors

Strategic Acquisitions

Strategic acquisitions enhance Royalty Pharma's portfolio, providing long-term revenue streams and strengthening its market position.

Pipeline Expansion

Expanding the pipeline to 17 therapies positions Royalty Pharma for future growth, with potential new revenue sources from successful drug launches.

Strong Financial Performance

Consistent growth in portfolio and royalty receipts underscores the company's robust financial health and ability to generate sustainable income.

Negative Factors

Declining Promacta Royalties

The decline in Promacta royalties due to generics impacts future revenue, highlighting the need for diversification in revenue streams.

Increased Interest Expenses

Rising interest expenses from recent debt issuance could pressure cash flow, affecting financial flexibility and profitability.

Negative Free Cash Flow Growth

Declining free cash flow growth may limit the company's ability to invest in new opportunities and manage debt, impacting long-term growth.

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 various biopharmaceutical therapies. In addition, the company collaborates with innovators from academic institutions, research hospitals and not-for-profits, small and mid-cap biotechnology companies, and pharmaceutical companies. Its portfolio consists of royalties on approximately 35 marketed therapies and 10 development-stage product candidates that address various therapeutic areas, such as rare disease, cancer, neurology, infectious disease, hematology, and diabetes. The company was founded in 1996 and is based in New York, New York.

How the Company Makes Money

Royalty Pharma generates revenue primarily through its portfolio of royalty interests in various biopharmaceutical products. The company acquires these royalties from other companies, often taking an upfront payment in exchange for a percentage of future sales from established drugs. This revenue model capitalizes on the success of marketed therapies, allowing Royalty Pharma to earn income as long as the drugs continue to generate sales. Key revenue streams include royalties from high-performing drugs in areas such as oncology, rare diseases, and infectious diseases. Additionally, Royalty Pharma has formed strategic partnerships and collaborations with leading biopharmaceutical companies, which enhance its revenue opportunities and provide access to new drugs in development. The company's ability to identify and invest in promising therapies is a significant factor contributing to its earnings.

Royalty Pharma Financial Statement Overview

Summary

Royalty Pharma exhibits strong financial health with high profitability, efficient cash flow management, and a solid equity base. While revenue growth is stable, the company shows potential for further expansion. Leverage is moderate, and cash flow generation remains robust, although recent free cash flow growth has declined slightly.

Income Statement

Royalty Pharma demonstrates strong profitability with a consistent gross profit margin of 100% and a robust EBIT margin of 83.76% in TTM. The net profit margin has improved to 44.28% in TTM, indicating enhanced efficiency. Revenue growth is modest at 1.94% in TTM, showing stability but limited expansion. Overall, the company maintains high profitability and stable revenue growth.

Balance Sheet

The company's debt-to-equity ratio stands at 1.26 in TTM, indicating moderate leverage. Return on equity is healthy at 15.20%, reflecting effective use of equity to generate profits. The equity ratio is not directly provided, but the balance sheet shows a solid equity base. While leverage is slightly high, the company maintains a strong equity position and profitability.

Cash Flow

Operating cash flow to net income ratio is strong at 2.05 in TTM, indicating efficient cash generation relative to net income. Free cash flow to net income ratio is stable at 1.0, showing consistent cash flow management. However, free cash flow growth is negative at -2.55%, suggesting a slight decline in cash flow generation. Overall, cash flow metrics are solid, with some room for improvement in growth.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.35B	2.26B	2.35B	2.24B	2.29B	2.12B
Gross Profit	2.35B	2.26B	2.35B	2.24B	2.29B	1.89B
EBITDA	1.58B	1.56B	1.89B	423.69M	1.43B	1.68B
Net Income	764.96M	858.98M	1.13B	42.83M	619.73M	975.04M
Balance Sheet
Total Assets	19.35B	18.22B	16.38B	16.81B	17.52B	16.02B
Cash, Cash Equivalents and Short-Term Investments	955.04M	1.77B	1.23B	2.43B	2.80B	2.65B
Total Debt	8.97B	7.61B	6.14B	7.12B	7.10B	5.82B
Total Liabilities	9.73B	7.88B	6.30B	7.29B	7.27B	6.12B
Stockholders Equity	6.41B	6.95B	6.53B	5.63B	5.78B	4.82B
Cash Flow
Free Cash Flow	2.41B	2.77B	2.99B	2.14B	2.02B	2.03B
Operating Cash Flow	2.41B	2.77B	2.99B	2.14B	2.02B	2.03B
Investing Cash Flow	-1.27B	-2.68B	-2.07B	-1.03B	-1.87B	-2.76B
Financing Cash Flow	-1.14B	361.14M	-2.15B	-944.86M	385.11M	1.49B

Royalty Pharma Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 38.60
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

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 38.6 is below the 20-day moving average (MA) of 39.02, above the 50-day MA of 38.17, and above the 200-day MA of 35.14, indicating a neutral trend. The MACD of -0.01 indicates Positive momentum. The RSI at 49.57 is Neutral, neither overbought nor oversold. The STOCH value of 38.11 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for RPRX.

Royalty Pharma Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
INCY	81 Outperform	$20.16B	17.23	30.39%	―	18.09%	3563.21%
RPRX	79 Outperform	$22.28B	22.07	11.51%	2.28%	3.72%	-31.46%
UTHR	79 Outperform	$22.27B	19.60	20.04%	―	13.50%	17.16%
GMAB	76 Outperform	$19.87B	13.64	28.20%	―	24.98%	127.06%
BNTX	53 Neutral	$22.24B	-35.16	-2.94%	―	7.04%	-25.24%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
ASND	46 Neutral	$12.22B	-47.09	―	―	103.32%	47.55%

Royalty Pharma Corporate Events

Royalty Pharma Completes $2 Billion Senior Notes Offering

On September 16, 2025, Royalty Pharma plc successfully completed its offering of senior notes totaling $2 billion, consisting of $600 million in 4.450% Senior Notes due 2031, $900 million in 5.200% Senior Notes due 2035, and $500 million in 5.950% Senior Notes due 2055. This financial maneuver, backed by senior unsecured guarantees, is part of a strategic move to strengthen the company’s capital structure and potentially enhance its market position. The offering, governed by an underwriting agreement established on September 2, 2025, includes standard terms for such financial instruments and highlights Royalty Pharma’s proactive approach in managing its financial obligations.