Royalty Pharma (RPRX) AI Stock Analysis

• Market Cap: $26.19B
• Dividend Yield: 2.23%
• Average Volume (3M): 3.65M
• Price to Earnings (P/E): 25.5
• Beta (1Y): 0.18
• Revenue Growth: 3.72%
• EPS Growth: -31.46%
• Country: US
• Employees: 75
• Sector: Healthcare
• Sector Strength: 45
• Industry: Biotechnology
• EPS (TTM): 1.47
• Shares Outstanding: 428,418,600
• 10 Day Avg. Volume: 3,448,055
• 30 Day Avg. Volume: 3,653,652
• PEG Ratio: 1.04
• Price to Book (P/B): 2.58
• Price to Sales (P/S): 7.02
• P/FCF Ratio: 6.70
• Enterprise Value/Market Cap: 1.06
• Enterprise Value/Revenue: 11.64
• Enterprise Value/Gross Profit: 11.64
• Enterprise Value/Ebitda: 16.93
• 1Y Price Target: $51.43
• Price Target Upside: 13.91% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 8
• EPS Forecast (FY): 4.87
• Revenue Forecast (FY): $3.26B

• Rating: 75 Outperform
• Price Target: $49.00 ▲(8.53% Upside)
• Action: Reiterated Date: 02/12/26
• Date: Action: Reiterated 02/12/26

The score is led by strong cash generation and high profitability, supported by constructive price trends. It is held back by leverage and a more moderate 2026 outlook (lower milestone receipts and higher interest costs), with valuation also not especially cheap at ~25x earnings.

Positive Factors

Cash generation

Royalty Pharma consistently generates very strong operating and free cash flow (~$2–$3B annually). Durable FCF funds acquisitions, dividends, and buybacks without reliance on dilutive equity, supporting repeatable capital deployment and cushioning timing volatility in milestones or trial outcomes.

High profitability

Net margins in the low-30% to high-40% range and EBITDA margins near 60–80% provide structurally strong earnings power. High margins enhance resilience to uneven revenue, support sustained dividends and buybacks, and allow the firm to absorb one-off hits while preserving long-term return generation.

Deal flow & market growth

Rapid expansion in synthetic royalty activity (> $2B deals and ~50% market value growth in 2025) enlarges the addressable market for royalty funding. Structural deal flow growth increases sourcing opportunities, diversification of cash streams and the firm's ability to compound returns through repeat acquisitions.

Negative Factors

High leverage

Investment-grade debt near $9B and debt running around 0.9–1.3x equity represent meaningful leverage. Elevated debt limits financial flexibility for opportunistic transactions, increases refinancing and covenant risk in tougher markets, and amplifies sensitivity to rising interest costs over the medium term.

2026 near-term headwinds

Guidance points to muted royalty growth (3%–8%) and a material drop in milestone receipts (~$128M to ~$60M). Structural drivers such as Promacta LOE and a U.S. Tysabri biosimilar reduce near-term recurring cash, constraining capital deployment and pressuring growth unless offset by new, sizable transactions.

Concentration of outcomes

Significant reliance on a handful of pivotal clinical readouts and unresolved arbitration creates binary, timing-sensitive outcomes. This concentration elevates revenue volatility risk and makes medium-term cash flow and reinvestment planning less predictable, potentially amplifying swings in portfolio receipts.

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

Strong profitability and consistently excellent operating/free cash flow (~$2B–$3B annually) support durable earnings power, but revenue growth is uneven, 2025 net income fell vs. 2024 despite higher revenue, and meaningful leverage (about $9B debt) adds balance-sheet risk.

Income Statement

Revenue has been relatively steady with modest growth overall (2025 up vs. 2024, but 2024 down vs. 2023). Profitability is a clear strength: net margins remain high (roughly low-30% to high-40% range in most years) and EBITDA margins are consistently strong (generally ~60–80%), supporting durable earnings power. The main weakness is volatility in bottom-line performance (notably the sharp dip in 2022 net margin), and 2025 net income declined versus 2024 despite higher revenue, signaling some earnings pressure.

Balance Sheet

The balance sheet is solid but levered. Debt is sizable (about $9.0B in 2025) with debt running around ~0.9–1.3x equity across the period, which increases financial risk versus lower-leverage peers. Offsetting this, equity has grown meaningfully (notably higher in 2025), total assets are large and rising, and returns on equity improved materially from the very weak 2022 level, though they remain below earlier peaks (2020–2023). Overall: strengthening capital base, but leverage remains a key watch item.

Cash Flow

Cash generation is a major strength. Operating cash flow and free cash flow are consistently very strong (roughly $2.0B–$3.0B annually), with a sharp rebound in 2025 free cash flow growth after a decline in 2024. Cash flow comfortably supports reported earnings (free cash flow runs at about 1.0x net income in each period provided), and operating cash flow coverage is generally robust (especially in 2021 and 2023), though it was more moderate in 2022 and 2024. Overall cash conversion looks high-quality and resilient.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	2.38B	2.26B	2.35B	2.24B	2.29B
Gross Profit	2.38B	2.26B	2.35B	2.24B	2.29B
EBITDA	1.64B	1.56B	1.89B	423.69M	1.43B
Net Income	770.95M	858.98M	1.13B	42.83M	619.73M
Balance Sheet
Total Assets	19.62B	18.22B	16.38B	16.81B	17.52B
Cash, Cash Equivalents and Short-Term Investments	637.50M	1.77B	1.23B	2.43B	2.80B
Total Debt	8.95B	7.61B	6.14B	7.12B	7.10B
Total Liabilities	9.91B	7.88B	6.30B	7.29B	7.27B
Stockholders Equity	6.48B	6.95B	6.53B	5.63B	5.78B
Cash Flow
Free Cash Flow	2.49B	2.77B	2.99B	2.14B	2.02B
Operating Cash Flow	2.49B	2.77B	2.99B	2.14B	2.02B
Investing Cash Flow	-1.61B	-2.68B	-2.07B	-1.03B	-1.87B
Financing Cash Flow	-1.19B	361.14M	-2.15B	-944.86M	385.11M

Royalty Pharma Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 45.15
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Negative
• 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 45.15 is above the 20-day moving average (MA) of 43.83, above the 50-day MA of 41.12, and above the 200-day MA of 37.14, indicating a bullish trend. The MACD of 1.29 indicates Positive momentum. The RSI at 71.81 is Negative, neither overbought nor oversold. The STOCH value of 71.30 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
UTHR	85 Outperform	$20.38B	20.28	20.04%	―	13.50%	17.16%
INCY	83 Outperform	$20.11B	15.61	29.87%	―	18.09%	3563.21%
RPRX	75 Outperform	$26.19B	25.49	11.48%	2.23%	3.72%	-31.46%
GMAB	66 Neutral	$18.05B	18.78	17.65%	―	24.98%	127.06%
ASND	57 Neutral	$14.42B	―	―	―	103.32%	47.55%
BNTX	53 Neutral	$26.66B	-41.77	-2.94%	―	7.04%	-25.24%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%

Royalty Pharma Corporate Events

Royalty Pharma Announces Planned Legal Leadership Transition

On December 20, 2025, Royalty Pharma plc announced that Executive Vice President and Chief Legal Officer George W. Lloyd, 66, would transition out of his executive role effective December 31, 2025, and remain with the company as a senior advisor under a new standard employee offer letter starting January 1, 2026. Executive Vice President and General Counsel Arthur R. McGivern, 50, who joined the company in October 2022 after serving as a partner at Goodwin Procter LLP, was scheduled to assume Lloyd’s responsibilities on January 1, 2026, marking a planned legal leadership transition that maintains continuity in the company’s senior legal function.

The most recent analyst rating on (RPRX) stock is a Buy with a $45.00 price target. To see the full list of analyst forecasts on Royalty Pharma stock, see the RPRX Stock Forecast page.

Royalty Pharma Gains From FDA Approval of MYQORZO

On December 19, 2025, Cytokinetics announced U.S. FDA approval of MYQORZO (aficamten), a cardiac myosin inhibitor indicated for adult patients with symptomatic obstructive hypertrophic cardiomyopathy, triggering economic benefits to Royalty Pharma under prior funding agreements. Royalty Pharma is entitled to a tiered royalty on MYQORZO sales—4.5% on sales up to $5 billion and 1% above that threshold—and has provided Cytokinetics with up to $450 million in long-term and launch capital related to the drug, of which $275 million has been drawn and $20 million repaid as of September 30, 2025, with total repayments to Royalty Pharma expected to reach 1.9 times the amounts drawn over 10 years, including up to an additional $175 million that Cytokinetics can access following approval, reinforcing Royalty Pharma’s future cash flow visibility and exposure to a newly approved cardiovascular therapy.

The most recent analyst rating on (RPRX) stock is a Buy with a $45.00 price target. To see the full list of analyst forecasts on Royalty Pharma stock, see the RPRX Stock Forecast page.