Royalty Pharma (RPRX) AI Stock Analysis

• Market Cap: $20.45B
• Dividend Yield: 2.42%
• Average Volume (3M): 4.58M
• Price to Earnings (P/E): 14.8
• Beta (1Y): 0.32
• Revenue Growth: 1.15%
• EPS Growth: 37.75%
• Country: US
• Employees: 75
• Sector: Healthcare
• Sector Strength: 39
• Industry: Biotechnology
• EPS (TTM): 0.41
• Shares Outstanding: 421,370,670
• 10 Day Avg. Volume: 4,284,798
• 30 Day Avg. Volume: 4,576,594
• PEG Ratio: -4.42
• Price to Book (P/B): 3.08
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 4.14
• Enterprise Value/Market Cap: 1.11
• Enterprise Value/Revenue: 2.51
• Enterprise Value/Gross Profit: 10.07
• Enterprise Value/Ebitda: 2.93
• 1Y Price Target: $43.75
• Price Target Upside: 20.29% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4

• Rating: 78 Outperform
• Price Target: $40.00 ▲(9.98%Upside)

Royalty Pharma's strong financial performance, bolstered by impressive earnings call outcomes and solid technical indicators, supports a positive stock outlook. While valuation remains reasonable, ongoing regulatory disputes and potential overbought conditions slightly temper the overall bullish sentiment.

Positive Factors

Financial Strategy

The transaction sets Royalty Pharma on track to meet or exceed its 5-year capital deployment target, demonstrating confidence in their strategic direction.

Regulatory Approvals

FDA has granted Breakthrough Therapy Designation to daraxonrasib for previously treated metastatic PDAC in patients with KRAS G12 mutations.

Royalty Financing Deal

The announced royalty financing deal with Revolution Medicines allows Royalty Pharma to participate in the upside of the target asset daraxonrasib for oncology.

Negative Factors

Management Strategy

The move to internalize the manager simplifies financial reporting and provides clear alignment between management and shareholders, but it might disrupt current operations.

Market Competition

Tremfya should fight Skyrizi to a draw in ulcerative colitis, and RPRX garners a tiered mid-single digit royalty on Tremfya through 2031-32.

Pipeline Challenges

The company's growth profile is above the peer average, yet the lack of an internal pipeline could pose challenges to adapting to potential changes in the regulatory environment.

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 makes money by acquiring royalty interests in drugs and biopharmaceutical products from various stakeholders, including academic institutions, research hospitals, and pharmaceutical companies. The company's primary revenue stream comes from the royalties it receives from the sales of these drugs, which can include treatments for a wide range of medical conditions. Royalty Pharma strategically invests in high-potential drugs and typically pays the original innovators a lump sum in exchange for a portion of future sales revenue. This model allows Royalty Pharma to benefit from the commercial success of these drugs. Additionally, the company often forms partnerships and collaborations to enhance its portfolio and maximize its revenue potential. Key factors contributing to its earnings include the success of the drugs in its portfolio, market expansion, and strategic acquisitions of new royalty interests.

Royalty Pharma Financial Statement Overview

Summary

Royalty Pharma demonstrates strong operational efficiency with impressive gross margins and robust cash flow generation. However, challenges in net income growth and profitability impact the overall financial health. Despite moderate leverage and strong equity levels, the company should focus on enhancing profitability to improve financial performance.

Income Statement

The income statement shows stable revenue with a slight decline over the TTM period compared to previous years. Gross profit margins remain strong, over 99%, indicating efficient cost management. However, the net profit margin has decreased due to higher expenses relative to revenue. The EBIT and EBITDA margins show strong operational efficiency, though the decline in net income suggests some profitability challenges.

Balance Sheet

The balance sheet indicates a moderate debt-to-equity ratio, suggesting manageable leverage levels. The equity ratio is stable, supporting financial stability. However, the return on equity (ROE) fluctuates due to varying net income, highlighting potential profitability issues. Overall, the company maintains a solid asset base with appropriate equity levels.

Cash Flow

Cash flows are robust, with strong operating cash flow relative to net income, indicating efficient cash generation from operations. The free cash flow remains positive, supporting financial flexibility. However, the free cash flow growth rate has slowed, suggesting a need for future improvements in cash flow generation to sustain growth.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.26B	2.26B	2.35B	2.24B	2.29B	2.12B
Gross Profit	2.26B	2.26B	1.79B	2.23B	2.27B	2.03B
EBITDA	2.33B	1.29B	1.89B	928.56M	1.45B	1.68B
Net Income	1.09B	859.00M	1.13B	42.83M	478.75M	495.20M
Balance Sheet
Total Assets	17.61B	18.22B	16.38B	16.81B	17.52B	21.10B
Cash, Cash Equivalents and Short-Term Investments	1.82B	987.23M	495.31M	2.43B	2.80B	1.99B
Total Debt	7.62B	7.61B	6.14B	7.12B	7.10B	5.82B
Total Liabilities	7.82B	7.88B	6.30B	7.29B	7.27B	6.12B
Stockholders Equity	6.69B	6.95B	6.53B	5.63B	5.78B	9.90B
Cash Flow
Free Cash Flow	2.70B	2.77B	2.99B	2.14B	2.02B	2.03B
Operating Cash Flow	2.70B	2.77B	2.99B	2.14B	2.02B	2.03B
Investing Cash Flow	-2.09B	-2.68B	-2.07B	-1.03B	-1.87B	-2.76B
Financing Cash Flow	-368.16M	361.14M	-2.15B	-944.86M	385.11M	1.49B

Royalty Pharma Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 36.37
• 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 RPRX, the sentiment is Positive. The current price of 36.37 is above the 20-day moving average (MA) of 35.06, above the 50-day MA of 33.65, and above the 200-day MA of 30.03, indicating a bullish trend. The MACD of 0.78 indicates Negative momentum. The RSI at 66.54 is Neutral, neither overbought nor oversold. The STOCH value of 88.60 is Negative, 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
EXEL	84 Outperform	$12.59B	20.94	30.22%	―	24.49%	244.87%
RPRX	78 Outperform	$20.45B	14.83	16.57%	2.42%	1.15%	37.75%
GMAB	78 Outperform	$12.61B	11.40	22.69%	―	25.11%	46.46%
INCY	74 Outperform	$13.25B	211.79	0.47%	―	17.13%	-88.78%
BNTX	58 Neutral	$26.44B	―	-3.87%	―	0.58%	-764.64%
MRNA	56 Neutral	$11.79B	―	-29.34%	―	-38.25%	44.29%
Sector *	52 Neutral	$7.50B	0.31	-61.87%	2.27%	17.10%	1.59%

Royalty Pharma Corporate Events

Royalty Pharma Completes Major Acquisition and Restructuring

Royalty Pharma has recently undergone significant restructuring and financial transactions. On May 16, 2024, RPH acquired all equity interests of RP LLC, involving a cash payment of $200 million and the issuance of 24,530,266 non-voting Class E ordinary shares. The transaction also included the assumption of a $380 million term loan facility. Additionally, the company amended its articles of association to provide new rights and streamline shareholder processes. These changes are expected to impact the company’s financial structure and governance, potentially influencing its market position and stakeholder relationships.

The most recent analyst rating on (RPRX) stock is a Buy with a $42.00 price target. To see the full list of analyst forecasts on Royalty Pharma stock, see the RPRX Stock Forecast page.

Royalty Pharma’s Annual General Meeting Highlights

On May 12, 2025, Royalty Pharma held its Annual General Meeting where shareholders voted on 15 proposals, including the approval of the Membership Interest Purchase Agreement and the 2025 Equity Incentive Plan. The meeting demonstrated strong shareholder engagement with 85.96% of voting power represented, and the results of the votes will impact the company’s strategic decisions and governance, including the election of nine directors and the ratification of Ernst & Young LLP as the independent auditor.

The most recent analyst rating on (RPRX) stock is a Buy with a $42.00 price target. To see the full list of analyst forecasts on Royalty Pharma stock, see the RPRX Stock Forecast page.

Royalty Pharma Appoints Dr. Vlad Coric to Board

On April 8, 2025, Royalty Pharma announced the appointment of Dr. Vlad Coric to its Board of Directors, effective immediately. Dr. Coric, who has extensive experience in the biopharmaceutical industry, is expected to bring significant expertise to Royalty Pharma, particularly in the royalty funding space, enhancing the company’s position as a leading partner in life sciences innovation.