10 Cheapest Stocks to Buy On Robinhood

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1. Royalty Pharma plc (NASDAQ:RPRX)

Market Cap: $16.2 billion

FWD PE Ratio: 6.66

Average Price Target Upside: 58.91%

Royalty Pharma plc (NASDAQ:RPRX) is a key player in funding biopharmaceutical innovation and the largest acquirer of biopharmaceutical royalties. It collaborates with a wide range of partners, including academic institutions, research hospitals, non-profits, biotechnology firms, and major pharmaceutical companies.

The company earns royalties based on the sales of leading therapies in its portfolio, which includes over 35 commercial products and 15 development-stage candidates. Royalty Pharma (NASDAQ:RPRX) reported strong performance for Q3 2024 on November 6, with 15% growth in both Portfolio Receipts and Royalty Receipts. Year-to-date capital deployment reached $2.6 billion, including acquisitions of royalties on three novel therapies. Recent highlights include royalties on Cobenfy for schizophrenia, Voranigo for glioma, and Tremfya for ulcerative colitis, all expected to boost long-term growth.

Royalty Pharma (NASDAQ:RPRX) maintains strong financial capacity with $3 billion in available financial resources, including $950 million in cash and equivalents at the end of Q3, ongoing business-generated cash, and access to debt markets. The company holds $7.8 billion in investment-grade debt, with a 3.1% average cost and a 12-year average maturity, aligned with its royalty portfolio duration. Its leverage ratio is approximately 3x total debt to adjusted EBITDA, and it also has $1.8 billion in undrawn credit capacity.

While we acknowledge the potential of Royalty Pharma plc (NASDAQ:RPRX) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than RPRX but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.

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