Draegerwerk AG & Co. KGaA (DRW3) AI Stock Analysis

• Market Cap: €1.49B
• Dividend Yield: 2.95%
• Average Volume (3M): 7.90K
• Price to Earnings (P/E): 13.8
• Beta (1Y): 0.53
• Revenue Growth: 2.14%
• EPS Growth: 6.69%
• Country: DE
• Employees: 15,444
• Sector: Healthcare
• Sector Strength: 45
• Industry: Medical - Devices
• EPS (TTM): 1.92
• Shares Outstanding: 8,600,000
• 10 Day Avg. Volume: 7,731
• 30 Day Avg. Volume: 7,901
• PEG Ratio: 0.55
• Price to Book (P/B): 0.57
• Price to Sales (P/S): 0.26
• P/FCF Ratio: 8.43
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: €81.00
• Price Target Upside: 4.92% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 70 Outperform
• Price Target: €99.00 ▲(28.24% Upside)

The score is primarily supported by solid financial stability (low leverage and stable operations) and reasonable valuation (moderate P/E with a dividend). The main offset is technical risk: the stock is in a strong uptrend but appears overbought on RSI/Stoch, which can increase near-term pullback risk.

Positive Factors

Market Position

Draeger’s long-standing leadership in critical-care devices and safety equipment creates durable demand from hospitals, EMS and industrial clients. A broad installed base and mission-critical product set support recurring service, replacement cycles and resilience versus cyclical consumer markets.

Healthy Gross Margin

A sustained ~45% gross margin indicates strong product mix and pricing power in medical and safety segments. High gross margin provides room to fund R&D and sustain margins through cost pressures, supporting long-term profitability and the ability to invest in product innovation.

Conservative Leverage

Low leverage and a stable capital structure give Draeger financial flexibility to fund capex, service contracts and strategic investments without stressing liquidity. This balance sheet strength helps absorb sector shocks and supports multi-year investment in product development and service networks.

Negative Factors

Declining Profitability

Eroding operating and net margins alongside a subdued ROE signal pressure on earnings quality and operational efficiency. Unless margins are stabilized, lower profitability can limit retained earnings, reduce reinvestment capacity, and constrain long-term shareholder returns.

Suboptimal Cash Conversion

When net income is not fully converting into operating cash flow, it raises concerns about the sustainability of reported earnings. Persistent weak cash conversion can limit free cash for dividends, upgrades and R&D, increasing reliance on external funding for growth initiatives.

Modest Revenue Growth

Low single-digit top-line growth and only modest free cash flow expansion constrain scale economies and limit the pace of strategic reinvestment. Over the medium term, slow organic growth could make it harder to expand market share or justify higher fixed-cost investments in new product lines.

Draegerwerk AG & Co. KGaA Business Overview & Revenue Model

Company Description

Draegerwerk AG & Co. KGaA (DRW3) is a global leader in medical and safety technology, operating primarily in the healthcare and industrial sectors. Founded in 1889 and headquartered in Lübeck, Germany, the company focuses on developing innovative products and solutions for emergency medical services, hospitals, and labor safety. Core offerings include ventilators, anesthesia machines, and monitoring systems, as well as personal protective equipment and gas detection systems for industrial applications.

How the Company Makes Money

Draegerwerk generates revenue primarily through the sale of its medical and safety technology products. Key revenue streams include the sale of medical devices such as ventilators, anesthesia devices, and patient monitoring systems, which are essential in hospitals and emergency medical services. Additionally, the company earns revenue from safety technology products, including personal protective equipment and gas detection systems for various industries. Significant partnerships with healthcare institutions, governments, and industrial enterprises bolster their sales, while ongoing service contracts and maintenance agreements for installed equipment provide a steady stream of recurring revenue. The company also invests in research and development to innovate and expand its product offerings, enhancing its market competitiveness and revenue potential.

Draegerwerk AG & Co. KGaA Financial Statement Overview

Summary

Stable revenue and healthy ~45% gross margin support results, and leverage is conservative (debt-to-equity ~0.31). Offsetting these positives, net/EBIT/EBITDA margins have declined and ROE is lower (6.7% TTM), with cash conversion below ideal (operating cash flow to net income < 1).

Income Statement

Draegerwerk AG & Co. KGaA shows a stable revenue base with a slight growth in the TTM period. The gross profit margin remains healthy at around 45%, indicating efficient cost management. However, the net profit margin has decreased slightly in the TTM, reflecting potential cost pressures or increased expenses. The EBIT and EBITDA margins have also seen a decline compared to previous years, suggesting a need for improved operational efficiency.

Balance Sheet

The company's debt-to-equity ratio is relatively low at 0.31, indicating a conservative leverage approach. Return on equity has decreased over the years, currently at 6.7% in the TTM, which may concern investors looking for higher returns. The equity ratio remains stable, suggesting a solid capital structure.

Cash Flow

Operating cash flow has improved in the TTM, but the free cash flow growth rate is modest. The operating cash flow to net income ratio is below 1, indicating that not all net income is being converted into cash. The free cash flow to net income ratio is healthy, suggesting that the company is generating sufficient cash relative to its net income.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	3.42B	3.37B	3.37B	3.05B	3.33B	3.41B
Gross Profit	1.55B	1.51B	1.46B	1.24B	1.54B	1.61B
EBITDA	351.13M	351.68M	318.33M	62.63M	374.43M	399.92M
Net Income	120.88M	124.41M	110.43M	-64.56M	154.23M	188.59M
Balance Sheet
Total Assets	3.03B	3.09B	3.09B	3.11B	3.18B	3.31B
Cash, Cash Equivalents and Short-Term Investments	188.28M	248.18M	279.36M	319.50M	577.38M	650.56M
Total Debt	295.57M	395.58M	471.38M	361.95M	348.01M	370.75M
Total Liabilities	1.52B	1.56B	1.69B	1.79B	1.92B	2.27B
Stockholders Equity	1.51B	1.54B	1.41B	1.32B	1.26B	1.03B
Cash Flow
Free Cash Flow	131.75M	103.52M	121.47M	-231.09M	274.54M	345.04M
Operating Cash Flow	202.71M	167.31M	189.68M	-144.23M	384.89M	459.98M
Investing Cash Flow	-97.39M	-43.39M	-67.34M	36.83M	-109.92M	-263.08M
Financing Cash Flow	-89.92M	-161.38M	-154.56M	-29.38M	-334.64M	114.25M

Draegerwerk AG & Co. KGaA Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 77.20
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DE:DRW3, the sentiment is Positive. The current price of 77.2 is below the 20-day moving average (MA) of 82.14, above the 50-day MA of 73.95, and above the 200-day MA of 68.88, indicating a bullish trend. The MACD of 4.98 indicates Negative momentum. The RSI at 65.24 is Neutral, neither overbought nor oversold. The STOCH value of 61.68 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DE:DRW3.

Draegerwerk AG & Co. KGaA Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DRW3	70 Outperform	€1.49B	13.78	8.22%	2.95%	2.14%	6.69%
SHL	67 Neutral	€47.05B	22.03	11.45%	2.13%	4.53%	10.12%
AFX	65 Neutral	€2.50B	17.36	6.79%	1.50%	7.82%	-19.80%
FME	64 Neutral	€11.02B	15.46	5.41%	3.54%	2.10%	9.19%
COP	60 Neutral	€1.41B	75.68	2.87%	0.20%	1.16%	-43.53%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
EVT	46 Neutral	€1.10B	-6.95	-17.98%	―	-2.67%	7.40%