Rational (RAA) AI Stock Analysis

• Market Cap: €7.53B
• Dividend Yield: 1.97%
• Average Volume (3M): 11.30K
• Price to Earnings (P/E): 29.5
• Beta (1Y): 0.79
• Revenue Growth: 5.82%
• EPS Growth: 8.00%
• Country: DE
• Employees: 2,778
• Sector: Industrials
• Sector Strength: 72
• Industry: Industrial - Machinery
• EPS (TTM): 5.53
• Shares Outstanding: 11,370,000
• 10 Day Avg. Volume: 9,402
• 30 Day Avg. Volume: 11,299
• PEG Ratio: 2.33
• Price to Book (P/B): 10.93
• Price to Sales (P/S): 7.85
• P/FCF Ratio: 37.26
• 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: €799.00
• Price Target Upside: 20.51% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 9
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 69 Neutral
• Price Target: €683.00 ▲(3.02% Upside)

Rational's strong financial performance, characterized by robust revenue growth and profitability, is the primary driver of its stock score. However, technical indicators suggest a bearish trend, which tempers the overall score. The valuation is reasonable, with a moderate P/E ratio and a decent dividend yield, providing some support to the stock's attractiveness.

Positive Factors

Strong Financial Health

Rational's strong financial health, characterized by consistent revenue growth and high profitability, ensures long-term stability and operational resilience, allowing the company to invest in innovation and expansion.

Low Leverage

Minimal leverage reduces financial risk and enhances Rational's ability to navigate economic downturns, providing flexibility for strategic investments and growth opportunities.

High Profitability Margins

High profitability margins indicate efficient operational management, allowing Rational to reinvest in R&D and maintain competitive advantages in the market.

Negative Factors

Decline in Free Cash Flow Growth

A decline in free cash flow growth could limit Rational's ability to fund new projects and innovations, potentially impacting long-term growth and competitiveness if the trend continues.

Moderate Revenue Growth

While revenue is growing, the moderate pace may not be sufficient to outpace competitors or meet market expectations, potentially affecting market share and investor confidence over time.

Potential Overvaluation Concerns

Perceived overvaluation could deter new investors and limit stock price appreciation, impacting Rational's ability to raise capital through equity markets if needed.

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 generates revenue primarily through the sale of its cooking systems and equipment, which represent its core product line. The company also earns money from complementary services such as maintenance contracts, training programs, and software subscriptions that enhance the use and efficiency of its cooking solutions. Additionally, Rational engages in strategic partnerships with distributors and culinary schools to expand its market reach and influence in the food service industry. The combination of direct sales and service offerings contributes significantly to its overall earnings.

Rational Financial Statement Overview

Summary

Rational exhibits a strong financial position with impressive growth in revenue and profitability, supported by efficient operations and robust cash flow generation. The balance sheet remains solid with low leverage and high return on equity. While the company is performing well across all financial metrics, continued monitoring of debt levels and maintaining cash flow growth will be crucial for sustaining its financial health.

Income Statement

Rational has demonstrated strong revenue growth with a TTM growth rate of 45.7%, indicating robust demand for its products. The company maintains healthy profitability with a gross profit margin of 59.3% and a net profit margin of 20.8% in the TTM. The EBIT and EBITDA margins are also strong at 27.2% and 30.4%, respectively, showcasing efficient operations. Overall, the income statement reflects a solid financial performance with consistent growth and profitability.

Balance Sheet

The balance sheet is stable with a low debt-to-equity ratio of 0.033, indicating prudent financial leverage. The return on equity is impressive at 30.3%, reflecting effective use of shareholder funds to generate profits. The equity ratio stands at 78.6%, suggesting a strong equity base relative to total assets. While the balance sheet is strong, the slight increase in debt over the years warrants monitoring.

Cash Flow

Rational's cash flow performance is commendable, with a free cash flow growth rate of 10.6% in the TTM, indicating improved cash generation capabilities. The operating cash flow to net income ratio of 1.37 and free cash flow to net income ratio of 0.90 suggest efficient cash conversion. The company has consistently improved its cash flow metrics, supporting its financial flexibility and ability to fund operations and growth.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.24B	1.19B	1.13B	1.02B	779.73M	649.59M
Gross Profit	729.75M	706.63M	638.62M	565.07M	429.27M	360.12M
EBITDA	372.13M	364.99M	317.96M	269.18M	189.82M	132.39M
Net Income	254.93M	250.53M	215.76M	185.72M	123.66M	80.10M
Balance Sheet
Total Assets	1.11B	1.11B	989.03M	899.22M	783.84M	670.75M
Cash, Cash Equivalents and Short-Term Investments	167.97M	493.62M	402.67M	202.34M	246.38M	226.61M
Total Debt	16.19M	29.80M	28.08M	19.00M	19.59M	22.75M
Total Liabilities	237.24M	249.26M	228.24M	222.98M	180.51M	135.66M
Stockholders Equity	870.65M	856.90M	760.79M	676.24M	603.33M	535.09M
Cash Flow
Free Cash Flow	238.72M	251.45M	223.71M	123.43M	145.89M	59.29M
Operating Cash Flow	265.32M	283.06M	258.35M	160.62M	171.71M	92.69M
Investing Cash Flow	-26.35M	-102.69M	-161.71M	-81.86M	-84.29M	38.39M
Financing Cash Flow	-183.43M	-166.16M	-165.56M	-124.61M	-65.85M	-78.93M

Rational Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 663.00
• 50DMA: Positive
• 100DMA: Positive
• 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 663 is below the 20-day moving average (MA) of 664.92, above the 50-day MA of 647.68, and below the 200-day MA of 676.25, indicating a neutral trend. The MACD of 4.32 indicates Negative momentum. The RSI at 51.07 is Neutral, neither overbought nor oversold. The STOCH value of 65.02 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
KRN	75 Outperform	€4.46B	15.40	14.99%	1.95%	8.15%	16.17%
JUN3	73 Outperform	€3.74B	13.14	11.92%	2.29%	-1.50%	2.01%
RAA	69 Neutral	€7.53B	29.53	31.18%	1.97%	5.82%	8.00%
PFV	64 Neutral	€1.62B	51.54	5.47%	4.66%	―	―
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
G1A	61 Neutral	€9.62B	24.00	17.71%	2.01%	2.26%	6.49%
DUE	54 Neutral	€1.58B	-49.02	-7.86%	3.12%	-18.21%	-137.62%