Royalty Pharma plc (RPRX)
Healthcare · NMS · US
Fundamentals
Valuation and ratings
Royalty Pharma plc trades at USD58.53, which is 25% below the USD73.15 our discounted cash flow model puts on the business. On that measure alone it screens as undervalued, though a DCF is an argument rather than a measurement, and the market is frequently right about why something is cheap.
Our moat model scores it 80 out of 100, which is a wide moat. A moat is a structural reason competitors cannot take the profits away, and it matters more to a long holding period than any single quarter's numbers do.
It changes hands at 29.7 times earnings. Be careful reading that in isolation: for a cyclical business a low P/E arrives at the top of the cycle, when profits are peaking and about to fall, which is exactly when the shares look cheapest and are not.
About Royalty Pharma plc
Royalty Pharma plc operates as a buyer of biopharmaceutical royalties and a funder of innovation in the biopharmaceutical industry in the United States. Its portfolio consists of royalties on approximately 35 marketed therapies and 20 development-stage product candidates that address various therapeutic areas, such as rare disease, oncology, neuroscience, infectious disease, hematology, and diabetes. The company has research and development funding collaboration to advance the development of JNJ-4804, an investigational medicine for autoimmune diseases. The company was founded in 1996 and is based in New York, New York.
RPRX passes 6 of our 30 screens today
Each screen prints the exact criteria it used, and the circumstances in which it is wrong.
Common questions
Is Royalty Pharma plc (RPRX) undervalued?
Against our discounted cash flow estimate of USD73.15, RPRX at USD58.53 is 25% below fair value. That is one model's answer, not a recommendation, and most of a DCF's output sits in a terminal value nobody can forecast.
What is RPRX's P/E ratio?
RPRX trades at 29.7 times earnings. A low P/E is not automatically cheap: on a cyclical company it is usually a warning that earnings are at a peak.
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Data from company filings, exchange quotes and SEC EDGAR 13F disclosures. Quotes are delayed. Metrics we do not have are left out rather than estimated. Educational information, not financial advice.