Rational (RAA) AI Stock Analysis

• Market Cap: €8.24B
• Dividend Yield: 1.82%
• Average Volume (3M): 12.05K
• Price to Earnings (P/E): 32.8
• Beta (1Y): 0.84
• Revenue Growth: 6.42%
• EPS Growth: 14.12%
• Country: DE
• Employees: 2,778
• Sector: Industrials
• Sector Strength: 83
• Industry: Industrial - Machinery
• EPS (TTM): 5.00
• Shares Outstanding: 11,370,000
• 10 Day Avg. Volume: 13,544
• 30 Day Avg. Volume: 12,053
• PEG Ratio: 123.33
• Price to Book (P/B): 9.23
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 35.82
• 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: €794.50
• Price Target Upside: 9.59% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 11

• Rating: 72 Outperform
• Price Target: ―

Rational's stock performance is underpinned by strong financial health, with consistent revenue growth, profitability, and a robust balance sheet. However, the technical analysis shows bearish momentum, and the high P/E ratio suggests concerns about valuation. The absence of recent earnings call data and corporate events limits additional insights. Overall, Rational is well-positioned financially, but caution is advised due to current technical trends and valuation concerns.

Positive Factors

Earnings Performance

Outpacing sales growth, EBIT increased by 13% y/y to €314 million in FY24.

Revenue Growth

Revenue increased by 6% y/y to €1,194m in FY24 driven by strong sales in iVario.

Negative Factors

Operating Expenses

Operating expenses may grow slightly faster than sales, leaving EBIT margins at around 26%.

Research and Development Impact

R&D had a negative impact on EBIT margins due to lower capitalisation of R&D costs in FY24.

Rational Business Overview & Revenue Model

Company Description

RATIONAL Aktiengesellschaft engages in the development, production, and sale of professional cooking appliances for industrial kitchens worldwide. It offers iCombi Pro and iCombi Classic, a combi-steamer with intelligent cooking paths, as well as care products for combi-steamers; iVario, a multifunctional cooking system that cooks in liquids or with contact with heat; and ConnectedCooking, an online portal for the professional kitchen. The company also provides accessories, service parts, and services for its products. It serves restaurants and hotels; communal catering, such as company canteens, hospitals, schools, universities, military, prisons, and retirement homes; and quick service restaurants, caterers, supermarkets, bakery and snack shops, butchers, petrol stations, and delivery services. The company sells its products through independent distribution partners. RATIONAL Aktiengesellschaft was founded in 1973 and is headquartered in Landsberg am Lech, Germany.

How the Company Makes Money

Rational AG generates revenue through the sale of its high-performance cooking systems, including its flagship products like the SelfCookingCenter and CombiMaster Plus. The company targets professional kitchens across various sectors such as restaurants, hotels, and institutional catering services, leveraging its strong brand reputation and technological innovation to drive sales. Rational also benefits from after-sales services, including maintenance and customer support, which provide additional revenue streams. Strategic partnerships with distributors and service partners worldwide enhance its market reach and contribute to its earnings by ensuring a comprehensive service network and accessibility to its products globally.

Rational Financial Statement Overview

Summary

Rational exhibits strong financial health across all verticals. The company demonstrates consistent revenue growth and profitability, supported by a robust balance sheet with low leverage. Cash flow generation is strong, though future investment capacity may be a concern. Overall, Rational is well-positioned for continued stability and growth, with minor areas for improvement in operational efficiency and investment activities.

Income Statement

Rational showed strong financial performance with consistent revenue growth from €649.6 million in 2020 to €1,193.5 million in 2024, marking a significant upward trend. Gross profit margin improved, indicating efficient production and cost management. However, the absence of EBIT in the latest year raises concerns about operational efficiency. Net profit margin remains robust, driven by consistent net income growth.

Balance Sheet

The balance sheet of Rational is robust, with a low debt-to-equity ratio indicating prudent financial leverage. The company's equity ratio is strong, showcasing a healthy balance between assets and liabilities. Return on equity is commendable, reflecting effective use of shareholder funds to generate profits. Overall, the balance sheet indicates financial stability and low-risk profile.

Cash Flow

Cash flow analysis reveals a positive trajectory with consistent growth in operating cash flow, supporting sustainability and expansion. Free cash flow has also grown, albeit at a slower pace compared to previous years. The operating cash flow to net income ratio is favorable, indicating solid cash generation relative to profits. Despite strong fundamentals, limited cash flow from investing activities could constrain future growth opportunities.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.20B	1.19B	1.13B	1.02B	779.73M	649.59M
Gross Profit	713.86M	706.63M	638.62M	565.07M	429.27M	360.12M
EBITDA	364.40M	364.99M	317.96M	269.18M	189.82M	132.39M
Net Income	251.28M	250.53M	215.76M	185.72M	123.66M	80.10M
Balance Sheet
Total Assets	966.85M	1.11B	989.03M	899.22M	783.84M	670.75M
Cash, Cash Equivalents and Short-Term Investments	391.28M	493.62M	402.67M	202.34M	246.38M	226.61M
Total Debt	28.08M	29.80M	28.08M	19.00M	19.59M	22.75M
Total Liabilities	228.24M	249.26M	228.24M	222.98M	180.51M	135.66M
Stockholders Equity	738.61M	856.90M	760.79M	676.24M	603.33M	535.09M
Cash Flow
Free Cash Flow	235.51M	251.45M	223.71M	123.43M	145.89M	59.29M
Operating Cash Flow	263.48M	283.06M	258.35M	160.62M	171.71M	92.69M
Investing Cash Flow	-35.94M	-102.69M	-161.71M	-81.86M	-84.29M	38.39M
Financing Cash Flow	-166.53M	-166.16M	-165.56M	-124.61M	-65.85M	-78.93M

Rational Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 725.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DE:RAA, the sentiment is Neutral. The current price of 725 is above the 20-day moving average (MA) of 714.95, below the 50-day MA of 725.00, and below the 200-day MA of 811.55, indicating a neutral trend. The MACD of -6.68 indicates Negative momentum. The RSI at 54.02 is Neutral, neither overbought nor oversold. The STOCH value of 77.64 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for DE:RAA.

Rational Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
RAA	72 Outperform	€8.24B	32.81	31.40%	1.82%	6.42%	14.12%
Sector *	62 Neutral	C$6.43B	7.67	3.30%	3.15%	6.91%	-13.05%
0J9C		€1.54B	14.47	4.78%	2.72%	―	―
0MPJ		€9.63B	25.46	16.56%	1.69%	―	―
0EXP		€4.08B	14.03	12.41%	1.71%	―	―
0LQ4		€4.42B	15.38	15.25%	1.62%	―	―
0FQR		€1.59B	42.24		4.52%	―	―