MeritValue

Royalty Pharma plc

RPRXdata completeness 88%8 fiscal years on file

Data notes: no data for concept 'capex'

The thesis, from the filings

Royalty Pharma plc earns about 5% on invested capital, but has diluted owners by 36% over 5 years — worth asking whether the growth reaches owners. The applicable estimate puts fair value near $14.15 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$2.29B1$2.24B2$2.35B3$2.26B3$2.38B3
Net income$619.7M4$42.8M5$1.13B6$859M6$770.9M6
Operating cash flow$2.02B7$2.14B8$2.99B9$2.77B9$2.49B9
Capital expenditure—————
Free cash flow (derived)—————
Total debt$14.2B10$14.2B11$12.3B12$15.2B13$17.9B13
Cash & equivalents$1.54B14$1.71B15$477M16$929M17$618.7M17
Diluted shares414.8M438.0M602.9M594.1M564.5M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$172.11
your share of equity
Profit it earned you last year
$13.66
Free cash flow it threw off
—
Debt you’d be carrying
$317.15

10 shares is a claim on $172.11 of net worth that earned you $13.66 last year, against $317.15 of debt.

iii. Is this a good business?
Moat signal · return on invested capital
5% avg · 5y
FY21 6%FY22 2%FY23 9%FY24 5%FY25 5%

It earned an average 5% on invested capital over 5 years. Compare that to what it costs to fund the business.

seeing a moat in the numbers →
Management signal · capital allocation
+36% shares · 5y

Share count is up 36% over 5 years — owners have been diluted. Worth asking what they got for it. Total debt has risen 26% over the same window.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0
DCF · Growth Exit 10Y
not applicable
only 0 years of FCF (need ≥3) — model not applicable
DCF · Growth Exit 5Y
not applicable
only 0 years of FCF (need ≥3) — model not applicable
Earnings Power Value
$14.15
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$770.9M
  • growthAssumed0.0%
Graham Number
$26.25
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

Sources — the receipts
  1. 10-K · period ending 2021-12-31 · accession 0001802768-24-000012 (Revenues)
  2. 10-K · period ending 2022-12-31 · accession 0001802768-25-000010 (Revenues)
  3. 10-K · period ending 2023-12-31 · accession 0001802768-26-000003 (Revenues)
  4. 10-K · period ending 2021-12-31 · accession 0001802768-24-000012 (NetIncomeLoss)
  5. 10-K · period ending 2022-12-31 · accession 0001802768-25-000010 (NetIncomeLoss)
  6. 10-K · period ending 2023-12-31 · accession 0001802768-26-000003 (NetIncomeLoss)
  7. 10-K · period ending 2021-12-31 · accession 0001802768-24-000012 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2022-12-31 · accession 0001802768-25-000010 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2023-12-31 · accession 0001802768-26-000003 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2021-12-31 · accession 0001802768-23-000007 (LongTermDebtNoncurrent)
  11. 10-K · period ending 2022-12-31 · accession 0001802768-24-000012 (LongTermDebtNoncurrent)
  12. 10-K · period ending 2023-12-31 · accession 0001802768-25-000010 (LongTermDebtNoncurrent)
  13. 10-K · period ending 2024-12-31 · accession 0001802768-26-000003 (LongTermDebtNoncurrent)
  14. 10-K · period ending 2021-12-31 · accession 0001802768-23-000007 (CashAndCashEquivalentsAtCarryingValue)
  15. 10-K · period ending 2022-12-31 · accession 0001802768-24-000012 (CashAndCashEquivalentsAtCarryingValue)
  16. 10-K · period ending 2023-12-31 · accession 0001802768-25-000010 (CashAndCashEquivalentsAtCarryingValue)
  17. 10-K · period ending 2024-12-31 · accession 0001802768-26-000003 (CashAndCashEquivalentsAtCarryingValue)