One-glance verdict
Undervalued
$73.13 our estimate vs market $59.62
Wall Street consensus: $59.87 (-18.1% lower than our fair-value estimate)
18% below our estimate, below the bear case
Fundamentals snapshot
Roche Holding AG
RHHBY · OQX · Healthcare · Drug Manufacturers - General
Current price
$59.62
52-week range
$40.07 - $60.85
Market cap
$380.03B
Balance sheet
Watch
13.73x Strong cushion
Net debt $28.75B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
3 Risks
3 rewards · 3 risks
- Reward Revenue grew 1.5% last year.
- Reward Returns 38.1% on equity, ahead of 60% of its peers.
- Risk Net debt grew 5.6% over 3 years.
- Risk Stock trades 4.6% above its 5-year average P/E.
What this company does
Roche Holding AG
Roche is a global healthcare company that makes money in two major ways: creating and selling medicines for complex diseases like cancer, and producing the tests and equipment that doctors use to identify illnesses. This two-part business is important because the high-potential but less predictable income from new drug discoveries is balanced by the steadier, more reliable sales from its diagnostics division.
How the company got here
Founded in Basel, Switzerland, in 1896 by Fritz Hoffmann-La Roche, the company was one of the first to manufacture medicines on an industrial scale. An early success was a non-prescription cough syrup launched in 1898 that became a bestseller for 60 years. By 1912, Roche had expanded to three continents with offices in nine countries. Key turning points included the mass production of synthetic vitamin C in 1934 and the introduction of the benzodiazepine class of tranquilizers, including Valium, in 1957. More recently, the company has focused on its two main divisions, pharmaceuticals and diagnostics, acquiring companies like Genentech in 2009 to strengthen its position in biotechnology and personalized medicine.
What it actually does
Roche is a global healthcare company that operates in two main areas: creating prescription medicines and developing tests and tools to diagnose diseases. You might not buy their products directly at a store, but your doctor might prescribe a Roche medicine for conditions like cancer or multiple sclerosis, or use their equipment to test your blood or tissue samples. The company aims to provide a complete healthcare journey, from preventing and detecting diseases early to treating them and monitoring the treatment's effectiveness. They are a major player in cancer treatments and also develop solutions for a wide range of other conditions including infectious diseases, and neurological and eye disorders.
Pharmaceuticals
This is Roche's largest business, making up the majority of its revenue. This division discovers, develops, and sells prescription drugs to hospitals, clinics, and pharmacies. They are particularly known for their medicines that treat various types of cancer, such as Herceptin and Avastin. Beyond cancer, they also have important drugs for immunological disorders, infectious diseases, and conditions affecting the nervous system, like Ocrevus for multiple sclerosis.
Diagnostics
This part of the company provides the tools that help doctors and scientists understand diseases. It is a world leader in what's called in-vitro diagnostics, which are tests done on samples like blood or tissue. This segment creates the instruments and chemical kits that laboratories use to perform a huge variety of tests, from checking for viruses like HPV and COVID-19 to monitoring blood sugar for diabetes. These diagnostic tools are crucial for doctors to make accurate decisions about which treatments will work best for a specific patient, a concept known as personalized healthcare.
What management is betting on now
Roche's core strategy is to tightly combine its strengths in both pharmaceuticals and diagnostics to lead in personalized healthcare. The goal is to find the right treatment for the right patient by using diagnostic tests to better understand the specific characteristics of a person's disease. Management is focused on accelerating its research and development (often called R&D) to bring new, transformative medicines to market. They are also investing in digital health and artificial intelligence to create smarter tools for diagnosis and treatment, while aiming to make their innovative products more accessible to people in lower-income countries.
Price history
How the share price has moved
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Is it cheap or expensive?
Fair value $73.13 vs current price $59.62
Wall Street consensus is the average analyst price target: $59.87 (-18.1% lower than our fair-value estimate).
Our most-likely fair value is $73.13 a share — about 22.7% above today's price of $59.62, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Watch
Net debt $28.7B. Interest coverage 13.7x.
Net debt
$28.75B
Interest coverage
13.73x
Roche Holding AG's profit covers its interest bill about 13.7 times over.
Watch
Worse cushion
Baseline
Better cushion
RHHBY
BASELINE
Roche Holding AG
Total debt $40.62B Interest coverage 13.73x This is the baseline the peer rows are being compared against.
Total debt $49.04B Interest coverage 26.36x +92% vs RHHBY Carries about 1.9x more debt cushion than RHHBY.
Total debt $49.01B Interest coverage 15.42x +12% vs RHHBY Has roughly the same debt cushion as RHHBY.
Total debt $53.91B Interest coverage 16.29x +19% vs RHHBY Carries about 1.2x more debt cushion than RHHBY.
Total debt $63.48B Interest coverage 6.52x -53% vs RHHBY Carries about 2.1x less debt cushion than RHHBY.
Total debt $54.91B Interest coverage 38.04x +177% vs RHHBY Carries about 2.8x more debt cushion than RHHBY.
What you should know
The case for and against RHHBY
3 Rewards
3 Risks
Rewards
-
Revenue grew 1.5% last year.
-
Returns 38.1% on equity, ahead of 60% of its peers.
-
Free cash flow was positive in 4/10 years.
Risks
-
Net debt grew 5.6% over 3 years.
-
Stock trades 4.6% above its 5-year average P/E.
-
Insider ownership is only 0.0% (peer median: 0.1%).
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
24.43x
Forward P/E
17.89x
P/B
9.58x
P/S
6.04x
EV/EBITDA
17.01x
PEG ratio
1.77x
Profitability
How much profit each dollar creates
Gross margin
74.2%
Operating margin
36.2%
Net margin
19.6%
ROE
38.1%
ROA
13.5%
Health
Liquidity and balance-sheet strength
Debt / equity
0.91x
Current ratio
1.23x
Quick ratio
0.80x
Total debt
$40.62B
Total cash
$11.87B
Growth
How the business has been compounding
Revenue TTM
$76.77B
Revenue 5Y CAGR
-1.3%
EPS TTM
2.44
EPS 5Y CAGR
1.4%
Cash flow
How much cash the business throws off
Operating CF TTM
$22.99B
Free CF TTM
$15.94B
FCF margin
20.8%
Dividend
Shareholder payout
Yield
2.6%
Payout ratio
64.6%
Last ex-div date
2026-03-13