NASDAQ:RPRX appears to be flying under the radar despite its strong fundamentals.

Last update: Jan 17, 2024

ROYALTY PHARMA PLC- CL A (NASDAQ:RPRX) was identified as a decent value stock by our stock screener. NASDAQ:RPRX scores well on profitability, solvency and liquidity. At the same time it seems to be priced very reasonably. We'll explore this a bit deeper below.

Valuation Assessment of NASDAQ:RPRX

ChartMill employs its own Valuation Rating system for all stocks. This score, ranging from 0 to 10, is determined by evaluating different valuation factors, including price to earnings and free cash flow, both in absolute terms and relative to the market and industry. NASDAQ:RPRX has earned a 8 for valuation:

The Price/Earnings ratio is 5.93, which indicates a rather cheap valuation of RPRX.
Based on the Price/Earnings ratio, RPRX is valued cheaply inside the industry as 94.55% of the companies are valued more expensively.
The average S&P500 Price/Earnings ratio is at 25.68. RPRX is valued rather cheaply when compared to this.
With a Price/Forward Earnings ratio of 7.01, the valuation of RPRX can be described as very cheap.
Based on the Price/Forward Earnings ratio, RPRX is valued cheaply inside the industry as 94.55% of the companies are valued more expensively.
RPRX's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 20.65.
Based on the Price/Free Cash Flow ratio, RPRX is valued cheaply inside the industry as 90.59% of the companies are valued more expensively.
RPRX's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
RPRX has a very decent profitability rating, which may justify a higher PE ratio.

Evaluating Profitability: NASDAQ:RPRX

ChartMill assigns a Profitability Rating to every stock. This score ranges from 0 to 10 and evaluates the different profitability ratios and margins, both absolutely, but also relative to the industry peers. NASDAQ:RPRX scores a 6 out of 10:

RPRX's Return On Assets of 1.16% is amongst the best of the industry. RPRX outperforms 83.66% of its industry peers.
RPRX has a better Return On Equity (3.00%) than 86.14% of its industry peers.
RPRX has a better Return On Invested Capital (5.08%) than 84.65% of its industry peers.
Looking at the Profit Margin, with a value of 7.93%, RPRX belongs to the top of the industry, outperforming 88.12% of the companies in the same industry.
RPRX has a better Operating Margin (43.55%) than 98.51% of its industry peers.

Deciphering NASDAQ:RPRX's Health Rating

ChartMill assigns a Health Rating to every stock. This score ranges from 0 to 10 and evaluates the different health aspects like liquidity and solvency, both absolutely, but also relative to the industry peers. NASDAQ:RPRX scores a 5 out of 10:

RPRX has a Altman-Z score of 1.72. This is in the better half of the industry: RPRX outperforms 66.83% of its industry peers.
RPRX has a better Debt to FCF ratio (4.31) than 87.13% of its industry peers.
RPRX has a Current Ratio of 13.51. This indicates that RPRX is financially healthy and has no problem in meeting its short term obligations.
With an excellent Current ratio value of 13.51, RPRX belongs to the best of the industry, outperforming 87.13% of the companies in the same industry.
A Quick Ratio of 13.51 indicates that RPRX has no problem at all paying its short term obligations.
RPRX has a Quick ratio of 13.51. This is amongst the best in the industry. RPRX outperforms 87.13% of its industry peers.

Analyzing Growth Metrics

To evaluate a stock's growth potential, ChartMill utilizes a Growth Rating on a scale of 0 to 10. This comprehensive assessment considers various growth aspects, including historical and estimated EPS and revenue growth. NASDAQ:RPRX has achieved a 4 out of 10:

The Earnings Per Share has grown by an impressive 64.60% over the past year.
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.

Our Decent Value screener lists more Decent Value stocks and is updated daily.

Our latest full fundamental report of RPRX contains the most current fundamental analsysis.

Disclaimer

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.