Royalty Pharma (RPRX) AI Stock Analysis

• Market Cap: $23.75B
• Dividend Yield: 2.26%
• Average Volume (3M): 2.98M
• Price to Earnings (P/E): 23.3
• Beta (1Y): 0.13
• Revenue Growth: 3.72%
• EPS Growth: -31.46%
• Country: US
• Employees: 75
• Sector: Healthcare
• Sector Strength: 45
• Industry: Biotechnology
• EPS (TTM): 0.51
• Shares Outstanding: 432,293,060
• 10 Day Avg. Volume: 3,861,877
• 30 Day Avg. Volume: 2,976,630
• 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: 1.30
• Enterprise Value/Revenue: 13.17
• Enterprise Value/Gross Profit: 13.18
• Enterprise Value/Ebitda: 19.55
• 1Y Price Target: $43.50
• Price Target Upside: 12.81% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 6
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 80 Outperform
• Price Target: $44.00 ▲(14.11% Upside)

Royalty Pharma's strong financial performance and positive earnings call are the most significant factors driving the stock score. The company's strategic acquisitions and pipeline expansion highlight its growth potential. While the technical analysis shows positive momentum, the valuation suggests the stock may be slightly overvalued. Overall, the company is well-positioned in the biotechnology industry with a solid financial foundation and growth prospects.

Positive Factors

Strategic Acquisitions

Strategic acquisitions enhance Royalty Pharma's portfolio, providing long-term revenue streams from high-value medications, supporting growth.

Pipeline Expansion

Expanding the pipeline to 17 therapies positions Royalty Pharma for future growth, with expectations of significant sales from new drug approvals.

Strong Financial Performance

Robust financial performance with 11% growth in receipts highlights effective portfolio management and strong cash flow generation.

Negative Factors

Declining Promacta Royalties

The decline in Promacta royalties due to generics impacts revenue, requiring strategic adjustments to maintain growth.

Increased Interest Expenses

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

Negative Free Cash Flow Growth

A decline in free cash flow growth suggests potential challenges in cash generation, impacting investment capacity and financial health.

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 the acquisition of royalty rights from pharmaceutical companies, which entitles it to a percentage of sales from specific drugs. This model allows the company to benefit from the commercial success of these drugs without bearing the costs and risks associated with drug development. Key revenue streams include ongoing royalty payments from these partnerships, as well as milestone payments when drugs reach certain sales targets. Additionally, Royalty Pharma often enters into strategic agreements with biotech firms and pharmaceutical companies, enhancing its portfolio and revenue potential. The company's ability to identify and secure lucrative royalty agreements with high-value medications is a significant factor in its earnings, contributing to its steady cash flow and growth.

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	0.00
EBITDA	1.58B	1.56B	1.89B	423.69M	1.43B	1.88B
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	8.95B	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	9.62B	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: 38.56
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• 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 38.56 is above the 20-day moving average (MA) of 37.29, above the 50-day MA of 36.50, and above the 200-day MA of 34.28, indicating a bullish trend. The MACD of 0.79 indicates Negative momentum. The RSI at 57.31 is Neutral, neither overbought nor oversold. The STOCH value of 76.54 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	$20.81B	17.78	30.39%	―	18.09%	3563.21%
RPRX	80 Outperform	$23.75B	23.32	11.51%	2.26%	3.72%	-31.46%
UTHR	79 Outperform	$19.33B	17.01	20.04%	―	13.50%	17.16%
GMAB	74 Outperform	$17.80B	14.19	26.08%	―	24.98%	127.06%
ASND	61 Neutral	$12.07B	―	―	―	55.77%	46.81%
BNTX	53 Neutral	$24.80B	―	-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 Reports Strong Q3 2025 Results

Royalty Pharma PLC is a leading player in the biopharmaceutical industry, specializing in acquiring biopharmaceutical royalties and funding innovation across the sector. The company collaborates with a range of partners, from academic institutions to global pharmaceutical companies, to support the development and commercialization of leading therapies.

Royalty Pharma’s Q3 2025 Earnings Call Highlights

Royalty Pharma’s third-quarter earnings call reflected a strong financial performance, marked by significant growth and strategic acquisitions. The company reported an impressive upward revision of its full-year guidance, despite facing challenges such as the anticipated decline in Promacta royalties and increased interest expenses. The overall sentiment was positive, highlighting the company’s diversified portfolio and promising pipeline expansion as key drivers of future growth.

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.

The most recent analyst rating on (RPRX) stock is a Buy with a $43.00 price target. To see the full list of analyst forecasts on Royalty Pharma stock, see the RPRX Stock Forecast page.

Henry Fernandez Steps Down from Royalty Pharma Board

On August 13, 2025, Henry Fernandez stepped down from his role as Lead Independent Director of Royalty Pharma‘s Board of Directors. Fernandez, who joined the board in July 2020 and was appointed Lead Independent Director in March 2021, has been credited with helping the company achieve significant milestones and positioning it for future growth. His departure was not due to any disagreements with the company, and the board expressed gratitude for his contributions. Royalty Pharma plans to appoint a new Lead Independent Director soon.

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 Earnings Call Highlights Strong Growth and Strategic Moves

The recent earnings call for Royalty Pharma PLC painted a largely positive picture, highlighting the company’s robust financial performance, strategic partnerships, and promising clinical developments. Despite these positives, the call also acknowledged some challenges, notably the ongoing royalty dispute with Vertex and issues related to operating costs.