Royalty PharmaSTU:RPD +0.52%72 Operating Margin % is 100.30% as of Mar. 2026, which is 58% above its 10-year median of 63.37. GuruFocus rates STU:RPD with a GF Score™ of 72/100 and a GF Value™ of €32.95 (Significantly Overvalued). The stock has 10 warning signs investors should review. Among 944 Biotechnology companies, Royalty Pharma ranks better than 98.94% on this metric.
Just like Gross Margin %, it is important to see a company maintains its operating margin over time. Among the same industry, a company with higher operating margin is more efficient in its operation. It is also more stable during industry slowdown or recessions. Peter Lynch prefers those with higher margins than those with lower margins.
Be Aware
Operating Margin % can be manipulated by adjusting the rate of depreciation, depletion and amortization (DDA).
If a company is facing competition, its Operating Margin % may decline. Often the Operating Margin % declines well before the company's Revenue or even profit decline. Therefore, Operating Margin % is a very important indicator of whether the company is facing problems.
For instance, by 2012, Nokia (NOK)'s problems were well known and its stock had lost more than 90% of its market value since 2007. But Nokias Operating Margin % had already been in decline since 2002, although its Earnings per Share (Diluted) were still rising. Investors who paid attention to Operating Margin % would have avoided this huge loss. The same can be said for Research-in-Motion (RIMM).
Therefore, Operating Margin % is a very important screening filter for GuruFocus. GuruFocus's Buffett-Munger screener requires that the profit margin is either consistent or expanding. The Model Portfolio of the Buffett-Munger screener has outperformed the market every year since inception in 2009.
Royalty Pharma Operating Margin % Related Terms
Royalty Pharma Operating Margin % Historical Data
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The historical data trend for Royalty Pharma's Operating Margin % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
STU:RPD vs BNTX, INSM, ROIV: Operating Margin % Comparison
For the Biotechnology subindustry, Royalty Pharma's Operating Margin %, along with its competitors' market caps and Operating Margin % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Royalty Pharma Operating Margin % vs Biotechnology Industry
For the Biotechnology industry and Healthcare sector, Royalty Pharma's Operating Margin % distribution charts can be found below:
* The bar in red indicates where Royalty Pharma's Operating Margin % falls into.
Operating Margin % - also known as operating income margin, operating profit margin and return on sales (ROS) - is the ratio of Operating Income divided by net sales or Revenue, usually presented in percent.
Royalty Pharma's Operating Margin % for the fiscal year that ended in Dec. 2025 is calculated as
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Royalty Pharma (STU:RPD) has a Operating Margin % of 100.30% as of Mar. 2026. Operating margin is the ratio of total operating income to net sales. View historical data on Royalty Pharma and its competitors. This is 58% above median its historical median of 63.37. Over the past decade, Royalty Pharma's Operating Margin % has ranged from 41.25 to 144.59. According to the industry distribution chart, Royalty Pharma ranks #10 out of 944 companies in the Biotechnology industry, placing it in the top 1.1%.
Is Royalty Pharma's Operating Margin % too high?
Royalty Pharma's current Operating Margin % of 100.30% is 58% above median its 10-year median of 63.37. Over the past 10 years, this metric has ranged from a low of 41.25 to a high of 144.59. Based on the distribution chart, Royalty Pharma ranks #10 out of 944 companies in the Biotechnology industry, which is in the top quartile — a strong position relative to peers. Overall, Royalty Pharma has a GF Score™ of 72/100 and is considered Significantly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Royalty Pharma's Operating Margin % compare to BNTX and INSM?
According to the Biotechnology industry distribution chart, Royalty Pharma ranks #10 out of 944 companies for Operating Margin %. This places Royalty Pharma in the top 1% of its industry — outperforming the majority of peers. Historically, Royalty Pharma's own Operating Margin % has ranged from 41.25 to 144.59 over the past decade. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Operating Margin % for a Biotechnology company?
A good Operating Margin % depends on the Biotechnology industry context. However, Operating Margin % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Operating Margin % mean?
A high Operating Margin % can signal that a stock is expensive relative to its fundamentals. Operating margin is the ratio of total operating income to net sales. View historical data on Royalty Pharma and its competitors. Royalty Pharma's current Operating Margin % is 100.30%, which is 58% above median its own 10-year median of 63.37. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Royalty Pharma stock overvalued right now?
Based on GuruFocus' analysis, Royalty Pharma (STU:RPD) is currently considered Significantly Overvalued. The stock's GF Value™ is €32.95, compared to a current price of €48.03 — trading 45.8% above its estimated fair value. The current Operating Margin % is 100.30%, which is 58% above median its 10-year median of 63.37. Royalty Pharma's overall GF Score™ is 72/100 with 10 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Operating Margin % calculated?
Operating Margin % is calculated from a company's financial statements. For Royalty Pharma (STU:RPD), the current Operating Margin % is 100.30% as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Royalty Pharma (STU:RPD) Overvalued in 2026?
Based on GuruFocus' analysis, Royalty Pharma stock appears to be overvalued.
The current stock price of €48.03 is trading 45.8% above its estimated GF Value™ of €32.95.
GuruFocus considers Royalty Pharma to be Significantly Overvalued.
Key valuation signals for STU:RPD:
Operating Margin %: 100.30% (58% above median its 10-year median of 63.37)
GF Value™: €32.95 vs. price of €48.03 (45.8% above fair value)
No single metric tells the full story. See the STU:RPD stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Royalty Pharma PLC is the largest buyer of biopharmaceutical royalties. The firm has a portfolio of royalties that entitles it to payments based on the sales of biopharma products. Royalty Pharma receives royalties on more than 35 commercial products, including AbbVie and Johnson & Johnson's Imbruvica (for chronic lymphocytic leukemia and other blood cancers), Biogen's Tysabri (for relapsing forms of multiple sclerosis), Vertex's cystic fibrosis franchise, and 10 development-stage product candidates.
72GF Score
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