Rational (RAA) AI Stock Analysis

• Market Cap: €7.24B
• Dividend Yield: 2.04%
• Average Volume (3M): 7.60K
• Price to Earnings (P/E): 28.6
• Beta (1Y): 0.83
• Revenue Growth: 6.30%
• EPS Growth: 11.88%
• Country: DE
• Employees: 2,778
• Sector: Technology
• Sector Strength: 87
• Industry: Industrial - Machinery
• EPS (TTM): 5.57
• Shares Outstanding: 11,370,000
• 10 Day Avg. Volume: 6,901
• 30 Day Avg. Volume: 7,596
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• 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: €776.27
• Price Target Upside: 22.34% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 12

• Rating: 61 Neutral
• Price Target: €688.00 ▲(8.43% Upside)

Rational's strong financial performance is a key strength, supported by high profitability margins and a robust balance sheet. However, technical indicators suggest bearish momentum, and the stock's valuation appears high, which may limit upside potential. The absence of earnings call data and corporate events means these factors do not influence the score.

Positive Factors

Earnings

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

Financial Performance

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

Market Expansion

Revenue growth of 8.6% Y/Y mainly driven by Europe and North America.

Negative Factors

Operating Expenses

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

Regional Sales

Sales in Asia were weaker, coming from a high base in FY23 with large one-off orders in China and Japan.

Research and Development

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 generates revenue primarily through the sale of its cooking systems and appliances, which are complemented by a range of support services, including maintenance, training, and consulting. The company benefits from a recurring revenue model through the sale of consumables and software solutions that enhance the functionality of its equipment. Key partnerships with distributors and culinary organizations help expand its market reach and enhance brand visibility. Additionally, Rational invests in research and development to innovate its product offerings, which drives sales growth and strengthens its competitive position in the market.

Rational Financial Statement Overview

Summary

Rational exhibits strong financial health with consistent revenue growth, high profitability margins, and a robust balance sheet with low leverage. Despite a slight decline in free cash flow growth, the company's cash flow ratios remain strong, supporting its operational and financial stability.

Income Statement

Rational has demonstrated strong revenue growth with a TTM increase of 1.34% and consistent profitability, evidenced by a high gross profit margin of 59.37% and a net profit margin of 20.90%. The EBIT and EBITDA margins are also robust at 27.10% and 30.31%, respectively, indicating efficient operational management. The company has shown resilience in maintaining growth and profitability despite industry challenges.

Balance Sheet

The balance sheet reflects a solid financial position with a low debt-to-equity ratio of 0.03, indicating minimal leverage and financial risk. The return on equity is strong at 31.04%, showcasing effective use of equity to generate profits. The equity ratio stands at 78.76%, suggesting a strong equity base relative to total assets, which enhances financial stability.

Cash Flow

Cash flow analysis reveals a slight decline in free cash flow growth at -8.35%, which could be a concern if it persists. However, the operating cash flow to net income ratio is healthy at 1.64, and the free cash flow to net income ratio is strong at 0.89, indicating good cash generation relative to net income. The company maintains a solid cash flow position despite recent fluctuations.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.22B	1.19B	1.13B	1.02B	779.73M	649.59M
Gross Profit	722.08M	706.63M	638.62M	565.07M	429.27M	360.12M
EBITDA	370.52M	364.99M	317.96M	269.18M	189.82M	132.39M
Net Income	253.67M	250.53M	215.76M	185.72M	123.66M	80.10M
Balance Sheet
Total Assets	1.03B	1.11B	989.03M	899.22M	783.84M	670.75M
Cash, Cash Equivalents and Short-Term Investments	402.54M	493.62M	402.67M	202.34M	246.38M	226.61M
Total Debt	26.85M	29.80M	28.08M	19.00M	19.59M	22.75M
Total Liabilities	217.93M	249.26M	228.24M	222.98M	180.51M	135.66M
Stockholders Equity	807.70M	856.90M	760.79M	676.24M	603.33M	535.09M
Cash Flow
Free Cash Flow	215.85M	251.45M	223.71M	123.43M	145.89M	59.29M
Operating Cash Flow	239.66M	283.06M	258.35M	160.62M	171.71M	92.69M
Investing Cash Flow	-47.18M	-102.69M	-161.71M	-81.86M	-84.29M	38.39M
Financing Cash Flow	-183.69M	-166.16M	-165.56M	-124.61M	-65.85M	-78.93M

Rational Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 634.50
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DE:RAA, the sentiment is Negative. The current price of 634.5 is below the 20-day moving average (MA) of 647.48, below the 50-day MA of 683.78, and below the 200-day MA of 764.46, indicating a bearish trend. The MACD of -12.40 indicates Negative momentum. The RSI at 36.25 is Neutral, neither overbought nor oversold. The STOCH value of 18.89 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DE:RAA.

Rational Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	61 Neutral	$35.45B	7.89	-10.11%	1.88%	8.47%	-9.45%
RAA	61 Neutral	€7.24B	28.55	33.60%	2.04%	6.30%	11.88%
0J9C	―	€1.47B	14.47	-6.59%	―	―	―
0MPJ	―	€10.05B	25.79	17.92%	―	―	―
0EXP	―	€3.07B	10.76	11.92%	―	―	―
0LQ4	―	€4.15B	14.49	15.37%	―	―	―
0FQR	―	€1.55B	49.34	5.47%	―	―	―