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Roche Holding AG

RHHBY
59
Drug Manufacturers - General · Healthcare
Price
$51.60
+0.15 (+0.29%)
Market Cap
$332.35B
Exchange
Other OTC
Winston Score
59
Winston is curious
A decent business — some strong pillars, some weaker.

Share count falling — buybacks

6.6% over 4y

The company has reduced its share count over this period, returning value to shareholders through buybacks.

Diluted shares outstanding: 6.88B (2021) → 6.42B (2025)

Roche is a Swiss healthcare company that makes prescription medicines and medical diagnostic tools. Its pharmaceutical division sells treatments for cancer, multiple sclerosis, and eye diseases — with drugs like Herceptin, Avastin, and Ocrevus among its best-known products. Its diagnostics division makes the lab equipment and tests that hospitals use to detect diseases, making Roche one of the few companies that both treats and diagnoses illness at scale.

Roche earns money by selling branded drugs to hospitals and insurers, and by selling diagnostic instruments and consumables to labs worldwide. It operates globally, with strong revenue from the United States, Europe, and Japan, and generates over $50 billion in annual sales. Its main competitive advantage is its deep pipeline of patented medicines and its integrated diagnostics business, but a key risk is patent expiration — several of its top-selling drugs already face biosimilar competition, which has been pressuring revenue in recent years.

Winston Score History

Score breakdown

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Quality

Gross Margin
71.7%
Premium pricing power — 71.7% gross margin
Operating Margin
23.2%
Excellent — 23.2% operating margin
ROCE
10.8%
Below par — 10.8% return on capital

ROIC between 5% and 15%. They earn 5 to 15 cents back per year on every dollar invested.

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Growth

Sales YoY
-12.2%
Shrinking sales (-12.2% YoY)
EPS YoY
-26.8%
Earnings shrinking (-26.8% YoY)

Earnings per share down more than 10%. Either a bad year, or a real decline.

EPS Consistency
2/8 quarters
Earnings rarely grow — volatile business

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Cash Flow

Cash Conversion
214%
Turns 214% of profit into real cash
FCF Margin
27.7%
Converts sales into free cash efficiently (27.7%)

Free cash flow margin above 20%. Out of every $100 in sales, more than $20 is real cash they keep.

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Stability

Debt / Equity
0.94
Moderate — manageable debt (0.94)
Interest Cover
11.45x
Comfortably covers interest (11.5x)

Interest coverage above 8. Profits cover interest many times over.

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Valuation

P/E Ratio (TTM)
18.9x
Fair value — P/E 18.9

P/E in the normal range. Price is roughly $15 for every $1 of yearly profit.

P/E vs Forward
+0.8
GROWING
Earnings roughly flat

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Dividends

Dividend Yield
2.88%
Moderate income — 2.88% yield

Standard yield zone for stable dividend payers. A meaningful piece of total return.

Dividend Growth
+19.2%
Dividend growing fast (19.2% YoY)

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