Royalty Pharma

RPRX

Medical - Pharmaceuticals · Healthcare

Exchange

NASDAQ

Winston Score

Winston is curious

A decent business — some strong pillars, some weaker.

Data as of Aug 23, 2026 · filings through Jun 30, 2026

How the score breaks down

Quality

Good

Growth

Mixed

Cash Flow

Exceptional

Stability

Good

Valuation

Strong

Dividends

Mixed

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Winston Score History

The full picture

Royalty Pharma is a company that collects royalties on prescription medicines — meaning it gets paid a percentage of drug sales without actually making or selling the drugs itself. It partners with universities, research hospitals, and biotech companies by giving them upfront cash in exchange for a share of future revenue from their drugs. Its portfolio includes royalties on well-known medicines like Imbruvica, Tremfya, and Cystic Fibrosis drugs made by companies like AbbVie and Vertex.

The company earns money purely from royalty payments, which explains its 100% gross margin — it has almost no cost of goods. Royalty Pharma operates globally, focusing on the US and European pharmaceutical markets, and is the largest buyer of biopharmaceutical royalties in the world, giving it a strong deal-flow advantage. The main risk is that its income depends on the commercial success of drugs it does not control, so patent expirations or competition from generic drugs can reduce royalty payments over time.

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Growth Profile

For growth stock investors

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

+16.5% YoY

YoY Growth Rate

Steady revenue growth

EPS Growth

-57.5% YoY

YoY Growth Rate

Earnings declining

Insider Activity

6.4%ownership

↑ Rising

Insiders increasing their stake — aligned with shareholders

Cash Position

Cash flow positive

$1.1B cash & investments

Company generates more cash than it spends — no dilution risk from fundraising

Growth + cash flow

Royalty Pharma is a rare growth stock that's already generating positive cash flow while growing at 16%. The Winston Score doesn't fully credit this transition from "burner" to "earner."

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Score breakdown

Every number that matters to educated investors.

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Quality

Profit per sale

Gross Margin

60.2%

Premium pricing power — 60.2% gross margin

Profit after running costs

Operating Margin

19.7%

Healthy — 19.7% operating margin

Return on the money invested

ROCE

8.4%

Below par — 8.4% return on capital

ROIC between 5% and 15%. They earn 5 to 15 cents back per year on every dollar invested.

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Growth

Sales growth

Sales YoY

+10.0%

Steady sales growth (+10.0% YoY)

Profit growth

EPS YoY

+3.3%

Modest earnings growth (+3.3% YoY)

Single-digit earnings growth — steady but not exciting.

How steady the profit is

EPS Consistency

4/8 quarters

Earnings inconsistent quarter-to-quarter

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Cash Flow

Profit that turns into cash

Cash Conversion

458%

Turns 458% of profit into real cash

Spare cash per sale

FCF Margin

147.4%

Converts sales into free cash efficiently (147.4%)

Free cash flow margin above 20%. Out of every $100 in sales, more than $20 is real cash they keep.

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Stability

What it owes vs what it owns

Debt / Equity

0.92

Moderate — manageable debt (0.92)

Covers its interest

Interest Cover

4.38x

Adequate interest coverage (4.4x)

Interest coverage between 3 and 8. Profits cover interest several times over.

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Valuation

Price vs profit

P/E Ratio (TTM)

25.4x

no trend

Growth-priced — P/E 25.4

P/E above the market average. People are paying up for expected growth.

Cheaper or dearer next year

P/E vs Forward

+18.3

GROWING

Earnings expected to grow meaningfully — cheaper on forward P/E (25.4 → 7.1)

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Dividends

Dividend

Dividend Yield

1.54%

no trend

Small dividend — 1.54% yield

Modest yield. The bulk of any return needs to come from price appreciation.

Dividend record

Dividend Growth

+6.3%

no trend

Dividend growing modestly (6.3% YoY)

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