Royalty Pharma plc (RPRX)
OvervaluedFundamental
64
Price
$63.86
Market Cap
$35.22B
Part 1 · What the company is worth
Overview
Royalty Pharma buys the right to a slice of future sales of approved or late-stage prescription drugs, paying pharmaceutical and biotech companies or academic institutions upfront cash in exchange for a percentage royalty on the medicine's sales for years to come. It does not discover, manufacture or sell any drug itself: its entire business is acquiring and holding a large, diversified portfolio of these royalty contracts, collecting a payment from the drugmaker every time the underlying medicine is sold.
How it makes money
Revenue, which the company calls royalty receipts, is simply the royalty percentage applied to each partner drug's sales, so it rises and falls with how well the underlying medicines sell and how many years of patent protection remain before generic competition erodes them. Royalty Pharma has no salespeople or marketing spend tied to the drugs themselves; its own costs are mainly interest on debt used to fund royalty purchases and the team that sources and prices new deals, so profitability depends heavily on paying the right price for each royalty stream upfront.
Competitive moat
Scale · NarrowRoyalty Pharma is the largest dedicated buyer of drug royalties, which gives it access to the biggest and most attractive deals, a lower cost of capital than smaller rivals, and decades of underwriting data on how drug sales evolve after launch. That scale is a real edge in winning deals, but it does not protect any single royalty stream from patent expiry or from a drug simply underperforming.
What drives demand
DefensiveRoyalty receipts depend on prescription drug sales, which are largely insulated from the broader economic cycle since patients keep taking medicines they need regardless of the economy. The bigger driver of any single year's results is the product mix in the portfolio — how a handful of large royalties like the cystic fibrosis franchise or Trelegy are performing — rather than macroeconomic conditions.
Key risks
- Patent expiry and generic competition — Every royalty stream has a finite life tied to the underlying drug's patent protection; once patents expire and generics enter, royalty receipts from that product can fall sharply within a year or two.
- Clinical, regulatory and commercial risk of underlying drugs — Royalty Pharma has no control over how the drugmakers it partners with run clinical trials, market their products or compete for prescriptions, so a disappointing launch or a safety issue with a partner drug directly cuts its receipts.
- Deal-sourcing and capital-allocation risk — Future growth depends on continuing to find and win new royalty deals at attractive prices; if competition for these deals increases or the pipeline of available royalties dries up, growth slows even if the existing portfolio performs well.
- Reliance on debt to fund royalty purchases — Royalty Pharma finances part of its portfolio with borrowed money, and higher interest rates or reduced access to credit markets raise the cost of funding new deals and can compress returns.
Customer concentration
Royalty Pharma does not disclose revenue by paying company, but states that no single product accounted for more than 26% of 2025 Portfolio Receipts, spreading the risk across dozens of royalty streams.
The case for
Buyers argue that a diversified portfolio of dozens of royalty streams smooths out the risk of any single drug disappointing, that recent deals on products like Voranigo and the cystic fibrosis franchise show Royalty Pharma can still find growth, and that royalty income is largely insulated from the economic cycle.
The case against
Sellers fear that the company's largest royalties will eventually face patent expiry and generic competition that new deals cannot fully replace, that its growth model depends on continuing to find attractively priced deals in an increasingly competitive market, and that the debt used to fund past acquisitions leaves less room to maneuver if interest rates stay high.
Written by the editors, published on August 18, 2026
Direct competitors
Who this company fights with for the same customers
No editorial profile for this company yet
No competitor list for this company yet.
Balance Sheet & Liquidity
Revenue
$2.54B
Trailing 12 months (through 6/30/2026)
Net Income
$812M
Trailing 12 months (through 6/30/2026)
Free Cash Flow
-
Total Equity
$9.71B
Total Liabilities
$9.91B
Current Ratio
2.80
Interest Coverage
4.19
Debt/EBITDA
5.75
Earnings Per Share
Revenue & Net Income
Free Cash Flow
Income Breakdown
Historical statement
Margins over time
Debt over time
How heavy the debt is
Growth grid
Growth — Revenue
Fair Value Estimation
Fair Value
$38.59
Current Price
$63.86
Margin of Safety
-65.5%
Fair Value Range
$25.08 - $52.09
Spread across the valuation methods used, not a statistically calibrated confidence interval.
Estimation Methods
Valuation Metrics
P/E Ratio
34.15
ROE
7.9%
P/B Ratio
2.53
P/FCF
-
Gross Margin
-
ROIC
6.2%
Profitability Radar
Value Creation (Economic Moat)
ROIC
6.2%
WACC
6.9%
ROIC − WACC
-0.7 pp
ROIC is roughly in line with the cost of capital — the company is barely covering its capital cost.
Fundamental Analysis Criteria
Passed (16)
- EPS shows upward trend
- EPS CAGR 6.16%
- ROIC 6.2%
- P/B ratio 2.53
- Debt/equity ratio
- Operating margin 59.6%
- Current ratio
- Interest coverage
- Debt/EBITDA
- Return on tangible assets
- Low reliance on intangibles
- ROE 12.3%
- Earnings surprise, average 6.3%
- Earnings quality (operating cash flow / net income) 3.67
- Share dilution -3.7%
- Piotroski F-Score 5/9
Failed (5)
- Price CAGR 2.38%
- Price below Graham Number
- DCF valuation (Unknown)
- Revenue growth 5Y 2.3%
- Net margin trend 32.0% vs 44.4%
Unavailable (6)
- Gross margin –
- P/FCF –
- Dividend payout –
- Positive free cash flow
- CapEx intensity
- PEG ratio (needs P/E > 0 and growth > 0)
Piotroski F-Score
Mixed signals: some areas need attention
Earnings Quality
High quality: earnings backed by cash
Share Dilution
Buying back shares. Shareholder friendly
Institutional Holdings
No institutional filings reported for this company.
Governance
Executive Team
| Name | Title | Age |
|---|---|---|
| Mr. Pablo Legorreta | Founder, Chairman of the Board & CEO | 62 |
| Mr. Terrance P. Coyne | Executive VP & CFO | - |
| Mr. Christopher Hite | Chairman of Partnering & Investments | 58 |
| Dr. Marshall Jonathan Urist M.D., Ph.D. | Head of Research & Investments | 49 |
| Mr. Greg Butz | Executive Vice President of Partnering & Investments | - |
| Mr. Eric Cornelius Schneider | Senior VP & Chief Technology Officer | - |
| Dr. James Folmar Reddoch Ph.D. | Executive VP of Investments & Chief Scientific Officer | 55 |
| Mr. George Grofik C.F.A., CPA | Senior VP and Head of Investor Relations & Communications | - |
| Mr. Arthur Richard McGivern J.D. | Executive VP of Investment & Chief Legal Officer | 50 |
| Ms. Molly Sawaya | Executive VP & Head of Human Capital | - |
Audit Risk
2
Board Risk
4
Compensation Risk
7
Shareholder Rights Risk
7
Documents
- View document
Annual Report (10-K)
A yearly overview of the business, its financial results, and the risks it faces.
Filed on 2026-02-11
- View document
Quarterly Report (10-Q)
A snapshot of financial performance for the most recent three-month period.
Filed on 2026-08-05
- View document
Current Report (8-K)
An announcement of a major event, such as a leadership change or big news.
Filed on 2026-08-05
via SEC EDGAR
Income History
via SEC EDGAR
Part 2 · The price and its context
This part shows how the price has behaved, not whether the company is worth owning. Inside: technical analysis, potential, historical drawdowns, gamma exposure.
Market Reaction Profile
How much RPRX moves, measured on its daily prices.
More volatile than 22% of the tracked stocks (90-day volatility).
- Volatility 30d
- 22.6%
- Volatility 90d
- 25.8%
- Beta vs S&P 500 (1y)
- 0.22Correlation 0.12
- Max drawdown (12m)
- -12.1%
- ATR (14d, % of price)
- 2.13%
Earnings reactions
How RPRX moved around its past quarterly results.
Next earnings release
Nov 4, 2026 · In 11 days · Before the open
EPS estimate: 1.18Revenue estimate: $885M
What usually happens
- Over the last 12 releases the stock moved a median of 1.4% the next day, up or down.
- Next-day moves: up 8, down 4 (out of 12).
- Of the 4 releases that beat estimates, the stock fell the next day after 0.
Release history
| Date | When | EPS est. | EPS actual | Surprise | Gap | 1 day | 5 days |
|---|---|---|---|---|---|---|---|
| Aug 5, 2026 | During the session | 1.30 | 1.32 | +1.3% | +3.6% | +0.5% | +0.5% |
| May 6, 2026 | During the session | 1.24 | 1.30 | +5.1% | +1.7% | +0.6% | +2.5% |
| Feb 11, 2026 | During the session | 1.35 | 1.47 | +8.7% | -2.9% | +0.1% | +2.6% |
| Nov 5, 2025 | During the session | 1.06 | 1.17 | +10.0% | -3.3% | +6.8% | +3.0% |
| Aug 6, 2025 | During the session | n/a | n/a | n/a | -2.6% | -2.1% | -5.4% |
| May 8, 2025 | During the session | n/a | n/a | n/a | -0.4% | +1.1% | -1.4% |
| Feb 11, 2025 | During the session | n/a | n/a | n/a | -0.4% | +1.7% | +3.6% |
| Nov 6, 2024 | During the session | n/a | n/a | n/a | +2.1% | -3.3% | -5.6% |
| Aug 8, 2024 | During the session | n/a | n/a | n/a | +1.4% | -4.0% | -2.2% |
| May 9, 2024 | During the session | n/a | n/a | n/a | +0.9% | -0.1% | +0.8% |
| Feb 15, 2024 | During the session | n/a | n/a | n/a | +1.3% | +2.5% | +5.9% |
| Nov 8, 2023 | During the session | n/a | n/a | n/a | -1.4% | +0.3% | -0.1% |
Release dates from SEC 8-K filings.
Updated 10/24/2026
Historical statistics for educational purposes only. They are not forecasts and not investment advice.
Price reaction to the news
Latest news on RPRX and what the price did next.
Return of the stock minus return of SPY over the same days. A news item close to a price move did not necessarily cause it. Historical data for educational purposes only, not investment advice.
Latest News
Recent headlines for RPRX.