Rational (RAA) AI Stock Analysis

• Market Cap: €7.08B
• Dividend Yield: 2.05%
• Average Volume (3M): 11.30K
• Price to Earnings (P/E): 27.9
• Beta (1Y): 0.84
• Revenue Growth: 5.82%
• EPS Growth: 8.00%
• Country: DE
• Employees: 2,778
• Sector: Technology
• Sector Strength: 88
• 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: €786.25
• Price Target Upside: 24.60% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 8
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 68 Neutral
• Price Target: €728.00 ▲(15.37% Upside)

Rational's strong financial performance is the most significant factor, supported by high profitability and a robust balance sheet. Technical indicators suggest a neutral trend with potential for upward momentum. However, the high P/E ratio indicates the stock may be overvalued, which could limit future gains.

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 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 demonstrates 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: Neutral
• Last Price: 631.00
• 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 631 is above the 20-day moving average (MA) of 630.45, below the 50-day MA of 650.70, and below the 200-day MA of 705.62, indicating a neutral trend. The MACD of -6.99 indicates Negative momentum. The RSI at 47.62 is Neutral, neither overbought nor oversold. The STOCH value of 64.19 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
JUN3	73 Outperform	€3.08B	10.83	11.92%	2.38%	-1.50%	2.01%
KRN	72 Outperform	€3.82B	13.28	14.99%	2.02%	8.15%	16.17%
RAA	68 Neutral	€7.08B	27.92	31.18%	2.05%	5.82%	8.00%
G1A	65 Neutral	€9.91B	25.44	17.71%	1.99%	2.26%	6.49%
PFV	64 Neutral	€1.53B	48.71	5.47%	4.73%	―	―
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
DUE	60 Neutral	€1.36B	-72.89	-7.86%	3.70%	-18.21%	-137.62%