# Royalty Pharma (RPRX.US)

Canonical: https://gigainvestors.com/s/RPRX

Analysis as of: 2026-10-16T07:31:40.248Z. Financial observations: FY2000–FY2026.

Listing currency: USD. Reporting currency: USD.

## Verdict

Not a wonderful business

Quality tests for Buy: not passed (profit record: pass; earnings resilience is evidence only). Published buy qualification: no.

Share price: $59.62 per share; close as of 2026-10-15.

Estimated value: low $27.35 per share, central $31.12 per share, high $36.14 per share. Buy at or below the central value $31.12 per share. Valuation as of 2026-10-16T07:31:40.248Z; scenarios are not confidence intervals.

Expected annual return: 6.6% at the stated quote. About 6.6% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; US 10-year bond 5.1% + 4 points).

## Checklist

### understandable: fail

- 3 revenue declines in the last 10 years (informational)

- operating margin variation exceeds 0.35

- Financial history: 10 years

- Years with declining revenue: 3

- Years with a net loss: 0

- Operating margin variation: 0.45×

Chart: Operating margin; fiscal year observations.

- FY2017: 0.59×

- FY2018: 0.76×

- FY2019: 1.45×

- FY2020: 0.75×

- FY2021: 0.62×

- FY2022: 0.14×

- FY2023: 0.63×

- FY2024: 0.57×

- FY2025: 0.66×

- LTM to Jun 2026: 0.62×

### moat: fail

- ROIC median below threshold

- ROIC worst years below threshold (more than 1 bad year allowed)

- ROIC, median of available years: 6.4%

- ROIC, second-lowest year: 4.3%

- Typical minus recent gross margin: 0.0 pp

- Typical gross margin (annual median): 100.0%

- Recent gross margin (lower of latest and 3-year median): 100.0%

- Years with nonpositive capital: 0

- Capital spending / revenue: 52.4%

- ROIC including acquisitions, ten-year median: 2.3%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2016: 6.2%

- FY2017: 6.2%

- FY2018: 11.3%

- FY2019: 19.5%

- FY2020: 5.4%

- FY2021: 4.3%

- FY2022: 1.9%

- FY2023: 8.7%

- FY2024: 6.6%

- FY2025: 7.3%

### economics: fail

- incremental invested capital return below threshold

- Owner earnings / net income, 5-yr: 1.23×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: $4.2B

- Net income, five-year total: $3.4B

- Return on incremental invested capital: 4.6%

- Working capital / revenue, annual change: -5.9 pp

- Working capital / revenue, change between three-year averages: -43.5 pp

- Working capital / revenue, final three-year average: 12.4%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2021: 1.62×

- FY2022: -7.85×

- FY2023: 0.51×

- FY2024: 1.96×

- FY2025: 1.66×

### management: fail

- buybacks leaned toward cheaper years (informational)

- ROIC first 3 years vs last 3 years: 6.2% vs 7.3%

- Per-share earnings: 2.34 to 1.45 (three-year endpoint medians)

- per-share value declined or ends nonpositive

- five-year and ten-year diluted share growth both above threshold

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: 8.5%

- Ordinary dilution, 5-year annual growth: 8.5%

- Diluted shares, 10-year annual growth: 8.5%

- Diluted shares, 5-year annual growth: 8.5%

- Per-share value growth: -5.8%

- Per-share value change: -$0.89

- Per-share value, starting three-year median: $2.34

- Per-share value, ending three-year median: $1.45

- Buybacks concentrated in cheaper years (correlation): 0.10

- Average buyback yield: 2.5%

- Buyback history: 5 years

- Debt-funded buybacks: No

- Acquisition spending: $159M

- Cumulative net income, 10 years: $9.9B

- ROIC, first three-year median: 6.2%

- ROIC, last three-year median: 7.3%

Chart: Earnings per share; fiscal year observations.

- FY2016: $2.28

- FY2017: $3.75

- FY2018: $3.89

- FY2019: $6.67

- FY2020: $2.60

- FY2021: $1.49

- FY2022: $0.10

- FY2023: $1.88

- FY2024: $1.45

- FY2025: $1.37

### accounting: pass

- latest-year receivables to sales index (DSRI) exceeds 1.465

- Sloan accruals: -8.8%

- Receivables to sales index (DSRI): 31.20×

- Restructuring years, last five: 1

- Stock compensation / operating cash flow: 11.6%

- Earnings backed by cash: Yes

- Operating cash / earnings: 3.23×

- Accounting red flags: 1

- Goodwill and intangibles / equity: 0.14×

Chart: Sloan accruals; fiscal year observations.

- FY2016: 5.5%

- FY2017: -1.8%

- FY2018: -2.1%

- FY2019: 5.5%

- FY2020: -5.0%

- FY2021: -8.0%

- FY2022: -12.5%

- FY2023: -11.3%

- FY2024: -10.5%

- FY2025: -8.8%

## Holders

- [Pat Dorsey](https://gigainvestors.com/DA): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Samantha McLemore](https://gigainvestors.com/PTNT): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Robert Torray](https://gigainvestors.com/T): tracked 13F investor; follow the investor page for holding quarter and amounts.

## Price story

Price needs cash profits to grow 9.1% a year for ten years · sales +6.6%

Story as of 2026-10-16T09:59:31.607Z; price observation 2026-10-15.

Price needs cash profits to grow 9.1% a year for ten years

- 2025-08-12: RPRX Q2 Deep Dive: Margins Compress Despite Solid Royalty Growth and Strategic Investments ([finance.yahoo.com](https://finance.yahoo.com/news/rprx-q2-deep-dive-margins-071849755.html))

- 2026-05-06: Royalty Pharma reports Q1 results; raises FY26 outlook ([seekingalpha.com](https://seekingalpha.com/news/4586774-royalty-pharma-reports-q1-results-raises-fy26-outlook?utm_source=feed_news_all&utm_medium=referral&feed_item_type=news))

### Sales · FY2025–2026

sales +6.6%; source https://www.sec.gov/Archives/edgar/data/1802768/000180276826000003/rprx-20251231.htm; observed 2026-02-11.

- FY2017: $1.6B 

- FY2018: $1.8B 

- FY2019: $1.8B 

- FY2020: $2.1B 

- FY2021: $2.3B 

- FY2022: $2.2B 

- FY2023: $2.4B 

- FY2024: $2.3B 

- FY2025: $2.4B 

- FY2026: $2.5B 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in biotechnology; annual sales are USD 2.4 billion.

- Source: https://www.sec.gov/Archives/edgar/data/1802768/000180276826000003/rprx-20251231.htm (filed 2026-02-11); FY2025: revenue 2378193000; grossProfit 2378193000; margin = grossProfit / revenue.

### Why customers stay

Margins ranged from 100% to 100% during 2023–25; it earns 6.4% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-11); FY2023: grossProfit / revenue = 100%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-11); FY2024: grossProfit / revenue = 100%.

- Source: https://www.sec.gov/Archives/edgar/data/1802768/000180276826000003/rprx-20251231.htm (filed 2026-02-11); FY2025: grossProfit / revenue = 100%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-11); 10-year return on capital observations [[2016,0.061937663196570354],[2017,0.061817099457349325],[2018,0.11307538651081381],[2019,0.19487408370707907],[2020,0.05435172291835826],[2021,0.043389359517984734],[2022,0.019346556319808667],[2023,0.08715692440588493],[2024,0.06569345303190621],[2025,0.07310757122961163]]; median 0.06381555811423828. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Where the cash goes

Reinvests 5.8% of cash earnings; earns 4.6% on new investment.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-11); FY2018: growth capex 0; upkeep 269593000; owner earnings 1348724000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-11); FY2021: growth capex 0; upkeep 523000; owner earnings 1005868861.6589899. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-11); FY2023: growth capex 0; upkeep 2115522000; cash acquisitions 0; owner earnings 580686527.8632635. Growth capex plus acquisitions / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-11); FY2024: growth capex 0; upkeep 0; cash acquisitions 0; owner earnings 1680363592.576117. Growth capex plus acquisitions / owner earnings = 0.

- Source: https://www.sec.gov/Archives/edgar/data/1802768/000180276826000003/rprx-20251231.htm (filed 2026-02-11); FY2025: growth capex 0; upkeep 0; cash acquisitions 74416000; owner earnings 1280802680.2480304. Growth capex plus acquisitions / owner earnings = 0.05810106517390264.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-11); Incremental return on capital 0.04594681876087742, from the economics test's unchanged annual inputs.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-11); Dividend observations: [[2017,735174000],[2018,814359000],[2019,739276000],[2020,397000000],[2021,285184000],[2022,333322000],[2023,358327000],[2024,376465000],[2025,378253000]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://www.sec.gov/Archives/edgar/data/1802768/000180276826000003/rprx-20251231.htm (filed 2026-02-11); FY2025: cash repurchases 1227383000 USD.

### What the price says

The price assumes cash profits grow 9.1% yearly over ten years.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-11); Ten-year compound average after fade. Initial solved rate 0.117319422405118. Price 59.62; FX 1; discount 0.1; same standard ten-year fade to terminal 0.03. FY2015 owner earnings/share -0.10185051148426945 → FY2025 2.2690961728535144. Closing-price date 2026-10-15.

## Monthly share-price history (USD per share)

- 2020-06: $48.55 per share

- 2020-07: $43.05 per share

- 2020-08: $41.38 per share

- 2020-09: $42.07 per share

- 2020-10: $36.70 per share

- 2020-11: $42.60 per share

- 2020-12: $50.05 per share

- 2021-01: $47.01 per share

- 2021-02: $46.57 per share

- 2021-03: $43.62 per share

- 2021-04: $44.00 per share

- 2021-05: $40.12 per share

- 2021-06: $40.99 per share

- 2021-07: $38.20 per share

- 2021-08: $38.65 per share

- 2021-09: $36.14 per share

- 2021-10: $39.53 per share

- 2021-11: $39.77 per share

- 2021-12: $39.85 per share

- 2022-01: $40.01 per share

- 2022-02: $39.26 per share

- 2022-03: $38.96 per share

- 2022-04: $42.58 per share

- 2022-05: $41.14 per share

- 2022-06: $42.04 per share

- 2022-07: $43.49 per share

- 2022-08: $41.81 per share

- 2022-09: $40.18 per share

- 2022-10: $42.32 per share

- 2022-11: $43.97 per share

- 2022-12: $39.52 per share

- 2023-01: $39.19 per share

- 2023-02: $35.85 per share

- 2023-03: $36.03 per share

- 2023-04: $35.15 per share

- 2023-05: $32.74 per share

- 2023-06: $30.74 per share

- 2023-07: $31.38 per share

- 2023-08: $29.82 per share

- 2023-09: $27.14 per share

- 2023-10: $26.87 per share

- 2023-11: $27.07 per share

- 2023-12: $28.09 per share

- 2024-01: $28.39 per share

- 2024-02: $30.34 per share

- 2024-03: $30.37 per share

- 2024-04: $27.70 per share

- 2024-05: $27.41 per share

- 2024-06: $26.37 per share

- 2024-07: $28.17 per share

- 2024-08: $29.03 per share

- 2024-09: $28.29 per share

- 2024-10: $27.00 per share

- 2024-11: $26.66 per share

- 2024-12: $25.51 per share

- 2025-01: $31.58 per share

- 2025-02: $33.64 per share

- 2025-03: $31.13 per share

- 2025-04: $32.82 per share

- 2025-05: $32.88 per share

- 2025-06: $36.03 per share

- 2025-07: $36.80 per share

- 2025-08: $35.98 per share

- 2025-09: $35.28 per share

- 2025-10: $37.54 per share

- 2025-11: $40.02 per share

- 2025-12: $38.64 per share

- 2026-01: $41.68 per share

- 2026-02: $46.21 per share

- 2026-03: $47.97 per share

- 2026-04: $50.09 per share

- 2026-05: $55.76 per share

- 2026-06: $56.07 per share

- 2026-07: $58.43 per share

- 2026-08: $61.41 per share

- 2026-09: $58.36 per share

- 2026-10: $56.57 per share

## Annual estimated value (USD per share)

- FY2024: low $12.15 per share, central $13.56 per share, high $15.45 per share

- FY2025: low $20.23 per share, central $23.02 per share, high $26.74 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

## Sources

[Original 10-K filing](https://www.sec.gov/Archives/edgar/data/1802768/000180276826000003/rprx-20251231.htm); period 2025-12-31, filed 2026-02-11.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.