Draegerwerk AG & Co. KGaA (DRW8) AI Stock Analysis

• Market Cap: €1.54B
• Dividend Yield: 3.46%
• Average Volume (3M): 3.38K
• Price to Earnings (P/E): 11.7
• Beta (1Y): 0.41
• Revenue Growth: 2.14%
• EPS Growth: 6.69%
• Country: DE
• Employees: 15,444
• Sector: General
• Sector Strength: N/A
• Industry: Medical - Devices
• EPS (TTM): 1.92
• Shares Outstanding: 10,160,000
• 10 Day Avg. Volume: 2,278
• 30 Day Avg. Volume: 3,385
• 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: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): 7.66
• Revenue Forecast (FY): €3.64B

• Rating: 75 Outperform
• Price Target: €73.00 ▲(31.29% Upside)
• Action: Reiterated Date: 01/16/26
• Date: Action: Reiterated 01/16/26

The score is driven mainly by solid financial stability (low leverage, strong equity base) and a favorable valuation (low P/E plus ~3% yield). Technicals are supportive with the price above major moving averages and positive MACD, though momentum looks somewhat stretched. Earnings-call commentary adds support through improving profitability and raised guidance, tempered by FX/tariff pressure and weaker China demand.

Positive Factors

Strong balance sheet / low leverage

Low leverage and a near-50% equity ratio provide durable financial flexibility: supports R&D, service investments and capex without heavy external funding, helps absorb macro shocks, and underpins the firm's ability to pursue strategic initiatives or selective M&A over the medium term.

Improving cash generation

Positive free cash flow growth indicates strengthening internal funding: improved FCF enables reinvestment in product development, maintenance services and working capital, reduces reliance on debt financing, and supports dividends or strategic investments over the next several quarters.

Rising order intake and margin recovery

A stronger order book and a material Q3 EBIT rebound reflect improving demand and operational leverage. Sustained order momentum increases revenue visibility, supports higher utilization of installed base and service upsell, and underpins durable margin recovery if cost discipline continues.

Negative Factors

Modest revenue growth and compressed margins

Very modest top-line growth coupled with declining net margins signals structural profit pressure: slow revenue expansion limits operating leverage while squeezed margins reduce retained earnings and ROE, constraining long-term reinvestment capacity and shareholder returns.

Weak demand in China / APAC

Cooling Chinese demand erodes a key growth avenue and regional diversification. Prolonged weakness in APAC would reduce incremental sales and margins, force greater dependence on Americas/EMEA, and may require structural adjustments to sales, pricing or local partnerships to restore long-term growth.

Rising functional expenses and lost one-off income

Higher recurring functional expenses, combined with the absence of a prior-year one-off boost, compress sustainable profitability. If structural cost bases remain elevated, margins and free cash flow will be persistently lower, necessitating productivity gains or pricing power to restore long-term profitability.

Draegerwerk AG & Co. KGaA Business Overview & Revenue Model

Company Description

Drägerwerk AG & Co. KGaA operates as a medical and safety technology company in Europe, the Americas, Africa, Asia, and Australia. The company develops, produces, and markets system solutions, equipment, and services for acute point of care, including emergency care, perioperative care, critical care, and perinatal care. It also develops, produces, and markets products, system solutions, and services for personal protection, gas detection technology, and integrated hazard management to customers in industry and mining sectors, as well as public sectors, such as fire departments, police, and disaster protection. The company's products portfolio includes anesthesia devices and ventilators, thermoregulation equipment, consumables and accessories, supply units, lights, gas management systems, patient monitoring, software applications, system products, and other services. Its product portfolio also comprises stationary and mobile gas detection systems, personal protective equipment, and alcohol and drug testing devices. In addition, the company offers various training and services, as well as fire training facilities for firefighters. Drägerwerk AG & Co. KGaA was founded in 1889 and is headquartered in Lübeck, Germany.

How the Company Makes Money

Draegerwerk generates revenue primarily through the sale of its medical and safety products and solutions. The company operates a diversified revenue model that includes direct sales to hospitals, healthcare institutions, and industrial clients, as well as ongoing maintenance and service contracts. Key revenue streams include the sale of medical devices such as anesthesia machines, ventilators, and patient monitoring systems, alongside safety equipment like gas detectors and protective gear. Additionally, Draegerwerk benefits from strategic partnerships with healthcare providers and organizations, enhancing its market presence and access to new customers. The company's commitment to research and development also enables it to introduce innovative products, thereby maintaining a competitive edge and driving additional revenue growth.

Draegerwerk AG & Co. KGaA Financial Statement Overview

Summary

Stable overall fundamentals supported by low leverage (debt-to-equity 0.31) and a strong equity ratio (~49.7%). Revenue growth is modest (TTM +1.75%) and profitability is under some pressure (net margin down to 2.97%; EBIT/EBITDA margins slightly lower). Cash generation is improving (FCF growth +7.8%) but cash conversion is only moderate (operating cash flow to net income 0.19).

Income Statement

Draegerwerk AG & Co. KGaA's income statement shows a modest revenue growth of 1.75% in the TTM period, indicating a recovery from previous declines. Gross profit margin remains stable at around 44.86%, reflecting consistent cost management. However, the net profit margin has decreased to 2.97% from 3.69% in the previous year, suggesting pressure on profitability. EBIT and EBITDA margins have also slightly declined, indicating challenges in operational efficiency.

Balance Sheet

The balance sheet of Draegerwerk AG & Co. KGaA demonstrates a solid equity position with a debt-to-equity ratio of 0.31, indicating low leverage and financial stability. The return on equity (ROE) is 6.70%, which is a decrease from previous years, suggesting reduced profitability for shareholders. The equity ratio stands at approximately 49.74%, highlighting a strong capital structure with a significant portion of assets financed by equity.

Cash Flow

The cash flow statement reveals a positive free cash flow growth rate of 7.80% in the TTM period, indicating improved cash generation. The operating cash flow to net income ratio is 0.19, suggesting moderate cash conversion efficiency. The free cash flow to net income ratio is 0.64, reflecting a reasonable level of cash available after capital expenditures. However, the overall cash flow performance shows room for improvement in terms of cash generation relative to 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: 55.60
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DE:DRW8, the sentiment is Positive. The current price of 55.6 is below the 20-day moving average (MA) of 71.84, below the 50-day MA of 66.25, and below the 200-day MA of 59.22, indicating a bullish trend. The MACD of 2.00 indicates Positive momentum. The RSI at 69.98 is Neutral, neither overbought nor oversold. The STOCH value of 71.80 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DE:DRW8.

Draegerwerk AG & Co. KGaA Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DRW8	75 Outperform	€1.54B	11.72	8.22%	3.46%	2.14%	6.69%
AFX	65 Neutral	€2.43B	16.81	6.79%	1.50%	7.82%	-19.80%
SBS	63 Neutral	€256.49M	16.01	―	2.71%	-1.64%	22.60%
COP	60 Neutral	€1.45B	77.95	2.87%	0.20%	1.16%	-43.53%
FME	58 Neutral	€11.46B	11.74	5.41%	3.54%	2.10%	9.19%
SHL	58 Neutral	€47.02B	22.28	11.45%	2.13%	4.53%	10.12%
Sector *	55 Neutral	$6.65B	3.83	-15.92%	6.20%	10.91%	7.18%