Royalty PharmaMEX:RPRXN 72 WACC % is 3.23% as of Jun. 26, 2026, which is 45% below its 10-year median of 5.92. GuruFocus rates MEX:RPRXN with a GF Score™ of 72/100 and a GF Value™ of MXN535.17. The stock has 10 warning signs investors should review. Among 1,429 Biotechnology companies, Royalty Pharma ranks better than 69.14% on this metric.
As of today (2026-06-26), Royalty Pharma's weighted average cost of capital is 3.23%%. Royalty Pharma's ROIC % is 9.23% (calculated using TTM income statement data).
Royalty Pharma generates higher returns on investment than it costs the company to raise the capital needed for that investment. It is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases.
For a comprehensive WACC calculation, please access the WACC Calculator.
Royalty Pharma (MEX:RPRXN) WACC % Explanation
Because it costs money to raise capital. A firm that generates higher ROIC % than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.
As of today, Royalty Pharma's weighted average cost of capital is 3.23%%. Royalty Pharma's ROIC % is 9.23% (calculated using TTM income statement data).
Royalty Pharma generates higher returns on investment than it costs the company to raise the capital needed for that investment. It is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases.
Be Aware
1. GuruFocus uses book value of debt (D) to do the calculation. It is simplified by adding latest one-year quarterly average Short-Term Debt & Capital Lease Obligation and Long-Term Debt & Capital Lease Obligation together.
For companies that report quarterly, GuruFocus combines all of the most recent year's quarterly debt data from the beginning of the year to the year-end and calculates the average.
For companies that report semi-annually, GuruFocus combines all of the most recent year's semi-annual debt data from the start of the year to the year-end and calculates the average.
For companies that report annually, GuruFocus combines the beginning and ending annual debt data from the most recent year and then calculates the average.
2. The WACC formula discussed above does not include Preferred Stock. Please adjust if preferred stock is considered.
3. (Expected Return of the Market - Risk-Free Rate of Return) is also called market premium. GuruFocus requires market premium to be 6%.
4. GuruFocus uses the latest TTM Interest Expense divided by the latest one-year quarterly average debt to get the simplified cost of debt.
Related Terms
Royalty Pharma WACC % Historical Data
* Premium members only.
The historical data trend for Royalty Pharma's WACC % 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.
For the Biotechnology subindustry, Royalty Pharma's WACC %, along with its competitors' market caps and WACC % 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 WACC % vs Biotechnology Industry
For the Biotechnology industry and Healthcare sector, Royalty Pharma's WACC % distribution charts can be found below:
* The bar in red indicates where Royalty Pharma's WACC % falls into.
The weighted average cost of capital (WACC) is the rate that a company is expected to pay on average to all its security holders to finance its assets. The WACC is commonly referred to as the firm's cost of capital. Generally speaking, a company's assets are financed by debt and equity. WACC is the average of the costs of these sources of financing, each of which is weighted by its respective use in the given situation. By taking a weighted average, we can see how much interest the company has to pay for every dollar it finances.
WACC
=
E
/
(E + D)
*
Cost of Equity
+
D
/
(E + D)
*
Cost of Debt
*
(1 - Tax Rate)
1. Weights:
Generally speaking, a company's assets are financed by debt and equity. We need to calculate the weight of equity and the weight of debt.
The market value of equity (E) is also called "Market Cap". As of today, Royalty Pharma's market capitalization (E) is MXN427302.993 Mil.
The market value of debt is typically difficult to calculate, therefore, GuruFocus uses book value of debt (D) to do the calculation. It is simplified by adding the latest one-year quarterly average Short-Term Debt & Capital Lease Obligation and Long-Term Debt & Capital Lease Obligation together. As of Mar. 2026, Royalty Pharma's latest one-year quarterly average Book Value of Debt (D) is MXN158659.7478 Mil.
a) weight of equity = E / (E + D) = 427302.993 / (427302.993 + 158659.7478) = 0.7292
b) weight of debt = D / (E + D) = 158659.7478 / (427302.993 + 158659.7478) = 0.2708
2. Cost of Equity:
GuruFocus uses Capital Asset Pricing Model (CAPM) to calculate the required rate of return. The formula is:
Cost of Equity = Risk-Free Rate of Return + Beta of Asset * (Expected Return of the Market - Risk-Free Rate of Return)
a) GuruFocus uses 10-Year Treasury Constant Maturity Rate as the risk-free rate. It is updated daily. The current risk-free rate is 4.374%. Please go to Economic Indicators page for more information. Please note that we use the 10-Year Treasury Constant Maturity Rate of the country/region where the company is headquartered. If the data for that country/region is not available, then we will use the 10-Year Treasury Constant Maturity Rate of the United States as default.
b) Beta is the sensitivity of the expected excess asset returns to the expected excess market returns. Royalty Pharma's beta is -0.2309.
c) (Expected Return of the Market - Risk-Free Rate of Return) is also called market premium. GuruFocus requires market premium to be 6%.
Cost of Equity = 4.374% + -0.2309 * 6% = 2.9886%
3. Cost of Debt:
GuruFocus uses latest TTM Interest Expense divided by the latest one-year quarterly average debt to get the simplified cost of debt.
As of Mar. 2026, Royalty Pharma's interest expense (positive number) was MXN6138.178 Mil. Its total Book Value of Debt (D) is MXN158659.7478 Mil.
Cost of Debt = 6138.178 / 158659.7478 = 3.8688%.
4. Multiply by one minus TTM Tax Rate:
GuruFocus uses the most recent TTM Tax Expense divided by the most recent TTM Pre-Tax Income to calculate the tax rate. The calculated TTM tax rate is limited to between 0% and 100%. If the calculated tax rate is higher than 100%, it is set to 100%. If the calculated tax rate is less than 0%, it is set to 0%.
The latest calculated TTM Tax Rate = 0 / 24707.663 = 0%.
Royalty Pharma's Weighted Average Cost Of Capital (WACC) for Today is calculated as:
WACC
=
E / (E + D)
*
Cost of Equity
+
D / (E + D)
*
Cost of Debt
*
(1 - Tax Rate)
=
0.7292
*
2.9886%
+
0.2708
*
3.8688%
*
(1 - 0%)
=
3.23%
* 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 (MEX:RPRXN) has a WACC % of 3.23% as of Jun. 26, 2026. The weighted average cost of capital (WACC) is the average rate a company pays to finance assets. View historical data on Royalty Pharma and its competitors. This is 45% below median its historical median of 5.92. Over the past decade, Royalty Pharma's WACC % has ranged from 4.21 to 7.79. According to the industry distribution chart, Royalty Pharma ranks #441 out of 1429 companies in the Biotechnology industry, placing it in the top 30.9%.
Is Royalty Pharma's WACC % too high?
Royalty Pharma's current WACC % of 3.23% is 45% below median its 10-year median of 5.92. Over the past 10 years, this metric has ranged from a low of 4.21 to a high of 7.79. The Biotechnology industry median WACC % is 10.04. Royalty Pharma's value of 3.23% is 67.8% below this industry median. Based on the distribution chart, Royalty Pharma ranks #441 out of 1429 companies in the Biotechnology industry, which is above the industry midpoint. Overall, Royalty Pharma has a GF Score™ of 72/100, reflecting its overall financial health beyond just this single metric.
How does Royalty Pharma's WACC % compare to BNTX and INSM?
According to the Biotechnology industry distribution chart, Royalty Pharma ranks #441 out of 1429 companies for WACC %. This puts Royalty Pharma in the upper half of its industry. The industry median WACC % is 10.04. Royalty Pharma's value of 3.23% is 67.8% below this benchmark. Historically, Royalty Pharma's own WACC % has ranged from 4.21 to 7.79 over the past decade. While the company's 10-year median is 5.92 vs. the industry median of 10.04, Royalty Pharma has consistently been below the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good WACC % for a Biotechnology company?
The median WACC % among Biotechnology companies is 10.04, based on 1,429 companies in the industry. Companies in the top quartile (top 25%) have a WACC % significantly above this median, while those in the bottom quartile fall well below. However, WACC % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Royalty Pharma's current WACC % of 3.23% is 67.8% below the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high WACC % mean?
A high WACC % can signal that a stock is expensive relative to its fundamentals. The weighted average cost of capital (WACC) is the average rate a company pays to finance assets. View historical data on Royalty Pharma and its competitors. For the Biotechnology industry, the median WACC % is 10.04 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Royalty Pharma's current WACC % is 3.23%, which is 45% below median its own 10-year median of 5.92. 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?
Royalty Pharma (MEX:RPRXN) has a current WACC % of 3.23%. The stock's GF Value™ is MXN535.17, compared to a current price of MXN775.06 — trading 44.8% above its estimated fair value. The current WACC % is 3.23%, which is 45% below median its 10-year median of 5.92 and 67.8% below the Biotechnology industry median of 10.04. 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 WACC % calculated?
WACC % is calculated from a company's financial statements. For Royalty Pharma (MEX:RPRXN), the current WACC % is 3.23% as of Jun. 26, 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 (MEX:RPRXN) Overvalued in 2026?
Based on GuruFocus' analysis, Royalty Pharma stock appears to be overvalued.
The current stock price of MXN775.06 is trading 44.8% above its estimated GF Value™ of MXN535.17.
Key valuation signals for MEX:RPRXN:
WACC %: 3.23% (45% below median its 10-year median of 5.92)
GF Value™: MXN535.17 vs. price of MXN775.06 (44.8% above fair value)
Industry Position: 67.8% below the Biotechnology median (#441 of 1429)
No single metric tells the full story. See the MEX:RPRXN 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
Get the complete analysis for MEX:RPRXN
WACC % is just one metric. See GF Value™, 30-year financials, guru trades, warning signs, and more.
Quick Browse
Personalize
Premium Gurus 
Create New Portfolio
MEX:RPRXN has been successfully added to your 
