Declining Stock and Decent Financials: Is The Market Wrong About Royalty Pharma Plc (NASDAQ:RPRX)?
Declining Stock and Decent Financials: Is The Market Wrong About Royalty Pharma Plc (NASDAQ:RPRX)?
Royalty Pharma (NASDAQ:RPRX) has had a rough three months with its share price down 8.9%. However, stock prices are usually driven by a company's financials over the long term, which in this case look pretty respectable. Particularly, we will be paying attention to Royalty Pharma's ROE today.
Royalty Pharma(纳斯达克:RPRX)的股价在过去三个月中下降了8.9%。然而,公司的股价通常是由其长期财务状况驱动的,而在这种情况下,其财务状况似乎相当可观。今天我们将特别关注Royalty Pharma的roe。
Return on equity or ROE is an important factor to be considered by a shareholder because it tells them how effectively their capital is being reinvested. In short, ROE shows the profit each dollar generates with respect to its shareholder investments.
股东必须考虑股本回报率或ROE,因为它告诉他们公司如何有效地重新投资他们的资本。 简而言之,ROE显示每美元股东投资所产生的利润。
How To Calculate Return On Equity?
如何计算股东权益报酬率?
ROE can be calculated by using the formula:
净资产收益率可以使用以下公式进行计算:
Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity
净资产收益率 = 净利润(从持续经营中获得)÷ 股东权益
So, based on the above formula, the ROE for Royalty Pharma is:
因此,根据上述公式,Royalty Pharma的roe为:
12% = US$1.2b ÷ US$9.9b (Based on the trailing twelve months to March 2024).
12%= 12b美元÷ 99b美元(基于截至2024年3月的过去十二个月)。
The 'return' refers to a company's earnings over the last year. One way to conceptualize this is that for each $1 of shareholders' capital it has, the company made $0.12 in profit.
“回报”指的是公司过去一年的收益。一种概念化的方法是,在每1美元股东资本的基础上,公司获得了0.12美元的利润。
What Is The Relationship Between ROE And Earnings Growth?
既然我们已经确定ROE是一种有效的利润生成标准,用于评估公司未来的盈利能力,我们现在需要评估公司“保留”为未来增长而重新投资的利润多少,这使我们对公司的增长潜力有了一个了解。一般而言,在其他条件相等的情况下,ROE和利润留存高的公司,增长率比没有这些属性的公司要高。
Thus far, we have learned that ROE measures how efficiently a company is generating its profits. Based on how much of its profits the company chooses to reinvest or "retain", we are then able to evaluate a company's future ability to generate profits. Generally speaking, other things being equal, firms with a high return on equity and profit retention, have a higher growth rate than firms that don't share these attributes.
到目前为止,我们已经了解到ROE衡量公司利润的效率如何。基于公司选择再投资或保留多少利润,我们随后能够评估公司未来产生利润的能力。总的来说,在其他条件相等的情况下,具有高ROE和利润保留的公司的增长率比没有这些特征的公司要高。
Royalty Pharma's Earnings Growth And 12% ROE
Royalty Pharma的收益增长和12%的roe
At first glance, Royalty Pharma seems to have a decent ROE. Further, the company's ROE is similar to the industry average of 14%. For this reason, Royalty Pharma's five year net income decline of 41% raises the question as to why the decent ROE didn't translate into growth. We reckon that there could be some other factors at play here that are preventing the company's growth. These include low earnings retention or poor allocation of capital.
乍一看,Royalty Pharma似乎具有不错的roe。此外,公司的roe与14%的行业平均水平相似。因此,Royalty Pharma五年的净收入下降41%,引发了以下问题:为什么良好的roe没有转化为增长?我们认为,可能有其他因素正在起作用,阻止了公司的增长,这些因素包括低收益保留或资本配置差。
Furthermore, even when compared to the industry, which has been shrinking its earnings at a rate of 0.4% over the last few years, we found that Royalty Pharma's performance is pretty disappointing, as it suggests that the company has been shrunk its earnings at a rate faster than the industry.
此外,即使与行业相比,在过去几年中以0.4%的速度缩减收益的行业相比,我们发现Royalty Pharma的表现令人失望,因为这表明公司的收益率下降速度比行业快。
![past-earnings-growth](https://usnewsfile.moomoo.com/public/MM-PersistNewsContentImage/7781/20240614/0-13fe98875d9dd34ec35501585193e087-0-5e5220ef8285ef5375518e5053f852de.png/big)
The basis for attaching value to a company is, to a great extent, tied to its earnings growth. What investors need to determine next is if the expected earnings growth, or the lack of it, is already built into the share price. By doing so, they will have an idea if the stock is headed into clear blue waters or if swampy waters await. One good indicator of expected earnings growth is the P/E ratio which determines the price the market is willing to pay for a stock based on its earnings prospects. So, you may want to check if Royalty Pharma is trading on a high P/E or a low P/E, relative to its industry.
附加价值的基础在于公司的收益增长,投资者需要确定的是预期的收益增长或缺乏预期是否已经内在地反映在股价中。这样,他们将知道股票是走向明朗前途还是陷入了泥泞之中。预期收益增长的一个很好的指标是P / E比率,它确定市场愿意根据盈利前景为股票支付的价格。因此,您可能需要检查Royalty Pharma是基于其成长前景的高P / E还是低P / E进行交易,相对于其行业。
Is Royalty Pharma Efficiently Re-investing Its Profits?
Royalty Pharma有效地重新投资其利润吗?
Despite having a normal three-year median payout ratio of 49% (where it is retaining 51% of its profits), Royalty Pharma has seen a decline in earnings as we saw above. So there might be other factors at play here which could potentially be hampering growth. For example, the business has faced some headwinds.
尽管具有正常的三年中位数的49%的股息支付率(它保留了其利润的51%),但Royalty Pharma的收益已经下降了,就像我们上面看到的一样。因此,在这里可能有其他因素正在起作用,可能会影响增长。例如,业务面临了一些逆风。
Moreover, Royalty Pharma has been paying dividends for four years, which is a considerable amount of time, suggesting that management must have perceived that the shareholders prefer consistent dividends even though earnings have been shrinking. Our latest analyst data shows that the future payout ratio of the company is expected to drop to 20% over the next three years. Accordingly, the expected drop in the payout ratio explains the expected increase in the company's ROE to 26%, over the same period.
此外,Royalty Pharma已经支付股息四年,这是相当长的时间,这表明管理层必须认为股东更喜欢持续的股息,即使收益已经下降。我们的最新分析师数据显示,公司未来的支付比率预计将在未来三年内下降到20%。因此,预期的支付比率下降可以解释同期公司roe的预期增加至26%。
Conclusion
结论
Overall, we feel that Royalty Pharma certainly does have some positive factors to consider. Although, we are disappointed to see a lack of growth in earnings even in spite of a high ROE and and a high reinvestment rate. We believe that there might be some outside factors that could be having a negative impact on the business. Having said that, looking at current analyst estimates, we found that the company's earnings growth rate is expected to see a huge improvement. To know more about the latest analysts predictions for the company, check out this visualization of analyst forecasts for the company.
总的来说,我们认为Royalty Pharma肯定有一些值得考虑的积极因素。尽管如此,我们对于roe很高且再投资率很高的情况下收益没有增长感到失望。我们相信可能有一些外部因素可能对业务产生负面影响。话虽如此,根据目前的分析师估计,我们发现公司的收益增长率有望大幅提高。要了解有关公司最新分析师预测的更多信息,请查看此可视化工具。
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