Rational (RAA) AI Stock Analysis

• Market Cap: €7.05B
• Dividend Yield: 1.97%
• Average Volume (3M): 11.30K
• Price to Earnings (P/E): 29.4
• Beta (1Y): 0.87
• Revenue Growth: 5.82%
• EPS Growth: 8.00%
• Country: DE
• Employees: 2,778
• Sector: Industrials
• Sector Strength: 72
• Industry: Industrial - Machinery
• EPS (TTM): 6.22
• Shares Outstanding: 11,370,000
• 10 Day Avg. Volume: 9,402
• 30 Day Avg. Volume: 11,299
• PEG Ratio: 21.76
• Price to Book (P/B): 7.99
• Price to Sales (P/S): 5.97
• P/FCF Ratio: 32.68
• 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: €812.90
• Price Target Upside: 31.11% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 9
• EPS Forecast (FY): 23.63
• Revenue Forecast (FY): €1.34B

• Rating: 72 Outperform
• Price Target: €688.00 ▲(10.97% Upside)
• Action: Upgraded Date: 03/21/26
• Date: Action: Upgraded 03/21/26

The score is supported primarily by strong financial quality—expanding margins, high returns, and a very low-debt balance sheet—while the main offset is weak technical momentum with the price below key moving averages and bearish MACD. Valuation is somewhat demanding (P/E ~29) but helped by a ~2.1% dividend yield.

Positive Factors

Conservative balance sheet & high returns

Very low leverage and rising equity indicate internally funded growth and strong capitalization. Consistently high returns on capital (20–29%) give the company durable financial flexibility to invest, weather demand swings, and prioritize long-term initiatives without relying on debt.

Expanding gross and net margins

Sustained margin expansion reflects pricing power, product differentiation, and operating leverage in equipment and service sales. Higher margins create durable cash generation and resilience to cost pressure, supporting profitability over multiple business cycles even if top-line growth slows.

Strong cash conversion

High conversion of earnings to cash enables self-funded capex, maintenance of dividend policy, and investment in software/services. Reliable cash conversion, despite some year-to-year swings, underpins long-term capital allocation and reduces reliance on external financing.

Negative Factors

Decelerating revenue growth

A clear deceleration in top-line growth suggests market saturation or cyclical weakness in equipment demand; if revenue momentum stays muted, sustaining high returns and margin expansion becomes harder and investment returns may compress over the medium term.

Free cash flow variability

Year-to-year swings in free cash flow reduce predictability for reinvestment, dividends, or M&A. Even with strong average conversion, episodic negative FCF years can force conservative capital allocation, delaying strategic investments or increasing sensitivity to demand shocks.

Revenue concentration in capital equipment sales

Heavy reliance on high-ticket equipment sales makes revenues cyclical and linked to capex budgets of restaurants/hotels. Services help diversify income but are secondary; prolonged capex weakness would create lumpy results and pressure medium-term growth predictability.

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

Strong and improving profitability with expanding gross and net margins, supported by a very conservative balance sheet (very low debt) and consistently high returns on capital. Key risk is slowing growth in the most recent year and some free-cash-flow variability.

Income Statement

Rational shows a strong and improving earnings profile. Revenue grew consistently from 2021–2025, with especially strong growth in 2022 and a solid step-up again in 2023–2024; 2025 growth remains positive but slower versus prior years. Profitability is a key strength: gross margin expanded from ~55% (2021–2022) to ~59% (2024), while net margin improved from ~15.9% (2021) to ~21.0% (2024), indicating strong pricing power and operating leverage. The main weakness is the clear deceleration in the most recent year (2025), which could signal normalization after a strong cycle.

Balance Sheet

The balance sheet is very conservative and a competitive advantage. Debt is low relative to equity (debt-to-equity roughly ~3–4% in 2020–2024), and equity has grown steadily alongside assets, indicating internally funded expansion and strong capitalization. Returns on shareholder capital are consistently high (roughly ~20% to ~29% from 2021–2024, and ~27% in 2025), suggesting efficient use of capital. The main watch-out is not leverage-related but rather sustaining these high returns if growth continues to cool.

Cash Flow

Cash generation is solid, with operating cash flow and free cash flow remaining strong in absolute terms and generally tracking earnings well (free cash flow at ~77%–89% of net income in 2022–2024). However, cash flow is somewhat volatile: operating cash flow dipped in 2022 versus 2021 before rebounding, and free cash flow growth turned negative in 2022 and again slightly negative in 2025 after a strong 2023–2024. Overall, the company converts profit to cash well, but year-to-year swings in free cash flow reduce predictability.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	1.26B	1.19B	1.13B	1.02B	779.73M
Gross Profit	743.44M	706.63M	638.62M	565.07M	429.27M
EBITDA	369.12M	364.99M	317.96M	269.18M	189.82M
Net Income	253.85M	250.53M	215.76M	185.72M	123.66M
Balance Sheet
Total Assets	1.19B	1.11B	989.03M	899.22M	783.84M
Cash, Cash Equivalents and Short-Term Investments	539.38M	493.62M	402.67M	202.34M	246.38M
Total Debt	27.14M	29.80M	28.08M	19.00M	19.59M
Total Liabilities	251.27M	249.26M	228.24M	222.98M	180.51M
Stockholders Equity	940.79M	856.90M	760.79M	676.24M	603.33M
Cash Flow
Free Cash Flow	230.16M	251.45M	223.71M	123.43M	145.89M
Operating Cash Flow	263.86M	283.06M	258.35M	160.62M	171.71M
Investing Cash Flow	-44.46M	-102.69M	-161.71M	-81.86M	-84.29M
Financing Cash Flow	-182.36M	-166.16M	-165.56M	-124.61M	-65.85M

Rational Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 620.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• 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 620 is below the 20-day moving average (MA) of 693.35, below the 50-day MA of 696.76, and below the 200-day MA of 672.27, indicating a bearish trend. The MACD of -17.28 indicates Positive momentum. The RSI at 28.34 is Positive, neither overbought nor oversold. The STOCH value of 15.14 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
KRN	75 Outperform	€3.58B	14.37	14.99%	1.95%	8.15%	16.17%
JUN3	73 Outperform	€2.78B	14.54	14.75%	2.29%	-1.50%	2.01%
RAA	72 Outperform	€7.05B	29.36	29.56%	1.97%	5.82%	8.00%
G1A	71 Outperform	€9.63B	25.61	17.25%	2.01%	2.26%	6.49%
PFV	64 Neutral	€1.63B	43.60	5.63%	4.66%	―	―
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
DUE	54 Neutral	€1.25B	7.70	-7.86%	3.12%	-18.21%	-137.62%