Royalty Pharma (RPRX) AI Stock Analysis

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Royalty Pharma

(NASDAQ:RPRX)

74Outperform

Royalty Pharma scores well overall, driven by strong financials, strategic growth plans, and positive earnings call sentiment. While technical indicators suggest caution due to potential overbought conditions, the company's strategic initiatives, such as the significant share repurchase plan and FDA approvals, bolster its growth outlook. Valuation is fair but not overly attractive, with a decent dividend yield providing additional investor appeal.

Positive Factors

Growth Profile

The growth profile is above the peer average.

Management Confidence

A $3B share buyback program boosts EPS and exemplifies management confidence.

Portfolio and Tariffs

The company's diversified portfolio and insulation from potential tariffs are seen as positives.

Negative Factors

Litigation Risks

Clarity on Vertex’s deuterated-triplet litigation is expected in the future, with significant potential financial implications based on royalty outcomes.

Regulatory Changes

There is an expectation for the company to adapt to any potential changes in the regulatory environment due to not having an internal 'pipeline'.

Royalty Pharma (RPRX) vs. S&P 500 (SPY)

Market Cap

$19.13B

Dividend Yield2.5%

Average Volume (3M)4.15M

Price to Earnings (P/E)13.9

Beta (1Y)0.27

Revenue Growth1.15%

EPS Growth37.75%

CountryUS

Employees75

SectorHealthcare

Sector Strength41

IndustryBiotechnology

Share Statistics

EPS (TTM)0.41

Shares Outstanding421,370,670

10 Day Avg. Volume4,978,668

30 Day Avg. Volume4,150,623

Financial Highlights & Ratios

PEG Ratio-0.79

Price to Book (P/B)2.14

Price to Sales (P/S)0.00

P/FCF Ratio5.19

Enterprise Value/Market Cap1.10

Enterprise Value/Revenue2.34

Enterprise Value/Gross Profit12.59

Enterprise Value/Ebitda3.14

Forecast

1Y Price Target

$41.60

Price Target Upside21.46% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering5

Royalty Pharma Business Overview & Revenue Model

Company DescriptionRoyalty 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 MoneyRoyalty 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 Key Performance Indicators (KPIs)

Any

Portfolio Receipts

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.

Chart InsightsRoyalty Pharma's Portfolio Receipts have shown significant growth, particularly in early 2023, reflecting a robust and diversified portfolio. The recent earnings call highlighted a 17% increase in Portfolio Receipts, driven by strong performance and strategic capital allocation, including a $2 billion share buyback plan. The company raised its full-year guidance, anticipating 6% to 12% growth, supported by promising developments like the Phase 3 R&D collaboration with Biogen. However, potential regulatory challenges and a royalty dispute with Vertex could pose risks to future growth.

Data provided by:

Main Street Data

Royalty Pharma Financial Statement Overview

Summary

Royalty Pharma presents a solid financial position with strong profitability, a robust balance sheet with zero debt, and healthy cash flow metrics. However, declining revenue and free cash flow growth rates could pose challenges for future growth.

Income Statement

Positive

Royalty Pharma demonstrates robust profitability with a high Gross Profit Margin of 73.90% and a strong Net Profit Margin of 37.93% for TTM. However, the company faces challenges with a declining Revenue Growth Rate of -3.85% from the previous year, indicating potential stagnation in revenue expansion.

Balance Sheet

Very Positive

The company shows a strong balance sheet with no debt, significantly lowering financial risk. The Equity Ratio is solid at 56.75%, indicating a strong equity base relative to assets. The ROE is impressive at 8.30%, showing effective use of equity to generate profit.

Cash Flow

Very Positive

Cash flow analysis reflects a stable position with a high Operating Cash Flow to Net Income Ratio of 3.24, suggesting excellent cash generation relative to net income. The Free Cash Flow to Net Income Ratio is also strong at 3.23, indicating efficient conversion of income to free cash flow, although Free Cash Flow Growth Rate is negative at -7.29%, pointing to potential pressure on cash flow growth.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
2.26B	2.35B	2.24B	2.29B	2.12B
	Gross Profit
2.26B	1.79B	2.23B	2.27B	2.03B
	EBIT
1.29B	1.49B	977.50M	1.43B	1.59B
	EBITDA
1.29B	1.89B	928.56M	1.45B	1.68B
	Net Income Common Stockholders
859.00M	1.13B	42.83M	478.75M	495.20M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
987.23M	495.31M	2.43B	2.80B	1.99B
	Total Assets
18.22B	16.38B	16.81B	17.52B	21.10B
	Total Debt
7.61B	6.14B	7.12B	7.10B	5.82B
	Net Debt
6.68B	5.66B	5.41B	5.56B	4.81B
	Total Liabilities
7.88B	6.30B	7.29B	7.27B	6.12B
	Stockholders Equity
6.95B	6.53B	5.63B	5.78B	9.90B
Cash Flow		Free Cash Flow
2.77B	2.99B	2.14B	2.02B	2.03B
	Operating Cash Flow
2.77B	2.99B	2.14B	2.02B	2.03B
	Investing Cash Flow
-2.68B	-2.07B	-1.03B	-1.87B	-2.76B
	Financing Cash Flow
361.14M	-2.15B	-944.86M	385.11M	1.49B

Royalty Pharma Technical Analysis

Technical Analysis Sentiment

Positive

Last Price34.25

Price Trends

50DMA

32.27

Positive

100DMA

31.26

Positive

200DMA

28.93

Positive

Market Momentum

MACD

0.40

Negative

RSI

64.53

Neutral

STOCH

77.45

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 34.25 is above the 20-day moving average (MA) of 32.58, above the 50-day MA of 32.27, and above the 200-day MA of 28.93, indicating a bullish trend. The MACD of 0.40 indicates Negative momentum. The RSI at 64.53 is Neutral, neither overbought nor oversold. The STOCH value of 77.45 is Neutral, 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 65 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

Overall Rating

UnderperformOutperform

Sector (52)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GMAB	81 Outperform	$12.23B	11.33	22.69%	―	25.11%	46.46%
EXEL	80 Outperform	$12.38B	20.60	30.22%	―	24.49%	244.87%
RPRX	74 Outperform	$19.13B	13.87	16.57%	2.50%	1.15%	37.75%
INCY	71 Outperform	$12.25B	195.88	0.47%	―	17.13%	-88.78%
BNTX	55 Neutral	$23.51B	―	-3.87%	―	0.58%	-764.64%
Sector *	52 Neutral	$5.19B	3.04	-44.64%	2.82%	16.45%	-0.53%
MRNA	43 Neutral	$9.61B	―	-29.34%	―	-38.25%	44.29%

* Healthcare Sector Average

Performance Comparison

RPRX

Royalty Pharma

34.25

7.56

28.33%

EXEL

Exelixis

44.69

23.63

112.20%

INCY

Incyte

63.81

6.62

11.58%

GMAB

Genmab

20.18

-9.51

-32.03%

MRNA

Moderna

26.39

-114.62

-81.29%

BNTX

BioNTech SE

97.80

5.33

5.76%

Royalty Pharma Earnings Call Summary

Earnings Call Date:May 08, 2025

(Q1-2025)

% Change Since: 5.29%|

Next Earnings Date:Aug 06, 2025

Earnings Call Sentiment Positive

The earnings call highlighted Royalty Pharma's strong financial performance, dynamic capital allocation strategy, and significant portfolio expansions, alongside some concerns about policy uncertainties and ongoing disputes. The company remains optimistic about its future growth and market opportunities.

Q1-2025 Updates

Positive Updates

Strong Financial Performance

Royalty Receipts grew by 12% in the first quarter, reflecting the strength of the diversified portfolio. Portfolio Receipts, including milestone payments, grew by 17% to $839 million.

Dynamic Capital Allocation

Royalty Pharma repurchased $723 million of shares in the first quarter and announced a plan to repurchase up to $2 billion of shares in 2025, while also deploying over $100 million on value-creating royalty transactions.

Portfolio Expansion

Expansion of the development stage pipeline with a Phase 3 R&D funding collaboration with Biogen for litifilimab in lupus, and advancement of trontinemab into Phase 3 in Alzheimer’s disease.

Raised 2025 Financial Guidance

Increased full-year guidance for Portfolio Receipts to $2.975 billion to $3.125 billion, driven by the diversified portfolio's strength and a tailwind from weakening U.S. dollars.

Positive Phase 3 Results for Ecopipam

Reported positive Phase 3 results for ecopipam in Tourette’s syndrome, showing significant benefit and safety, with plans for FDA submission.

Negative Updates

Challenges with Regulatory Environment

Concerns about potential cuts to NIH funding and ongoing policy uncertainties may impact the funding landscape for biopharma innovation.

Vertex CF Royalty Dispute

Dispute with Vertex regarding the royalty status of deuterated Kalydeco remains unresolved, with no update on arbitration.

Company Guidance

During Royalty Pharma's first-quarter earnings call for 2025, several key financial metrics and strategic updates were highlighted. Royalty Receipts saw a 12% increase, contributing to a 17% rise in Portfolio Receipts, driven by a strong performance across their diversified portfolio. In terms of capital allocation, the company repurchased $723 million worth of shares, part of a larger $2 billion buyback plan for the year, and deployed over $100 million on royalty transactions. Royalty Pharma also raised its full-year guidance for Portfolio Receipts to a range between $2.975 billion and $3.125 billion, anticipating growth of 6% to 12%. The company reported a strong portfolio cash flow with an adjusted EBITDA margin of about 73%. Additionally, they highlighted several promising developments in their portfolio, including a Phase 3 R&D collaboration with Biogen and positive clinical outcomes for ecopipam in Tourette's syndrome.

Royalty Pharma Corporate Events

Private Placements and FinancingM&A TransactionsBusiness Operations and Strategy

Royalty Pharma Completes Major Acquisition and Restructuring

Neutral

May 19, 2025

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.

Spark’s Take on RPRX Stock

According to Spark, TipRanks’ AI Analyst, RPRX is a Outperform.

Royalty Pharma scores well overall, driven by strong financials, strategic growth plans, and positive earnings call sentiment. While technical indicators suggest caution due to potential overbought conditions, the company’s strategic initiatives, such as the significant share repurchase plan and FDA approvals, bolster its growth outlook. Valuation is fair but not overly attractive, with a decent dividend yield providing additional investor appeal.

To see Spark’s full report on RPRX stock, click here.

Shareholder MeetingsBusiness Operations and Strategy

Royalty Pharma’s Annual General Meeting Highlights

Neutral

May 12, 2025

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.

Spark’s Take on RPRX Stock

According to Spark, TipRanks’ AI Analyst, RPRX is a Outperform.

Royalty Pharma demonstrates strong financial stability and strategic growth initiatives, as highlighted by the earnings call. The company is well-positioned in the biotechnology sector despite challenges in revenue growth and potential regulatory headwinds. Technical indicators suggest a positive trend, complemented by a fair valuation with a reasonable dividend yield.

To see Spark’s full report on RPRX stock, click here.

Executive/Board Changes

Royalty Pharma Appoints Dr. Vlad Coric to Board

Positive

Apr 10, 2025

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.

Spark’s Take on RPRX Stock

According to Spark, TipRanks’ AI Analyst, RPRX is a Outperform.

Royalty Pharma scores well overall, driven by strong financials, strategic growth plans, and positive earnings call sentiment. While technical indicators suggest caution due to potential overbought conditions, the company’s strategic initiatives, such as the significant share repurchase plan and FDA approvals, bolster its growth outlook. Valuation is fair but not overly attractive, with a decent dividend yield providing additional investor appeal.

To see Spark’s full report on RPRX stock, click here.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.