Rational (RAA) AI Stock Analysis

• Market Cap: €8.36B
• Dividend Yield: 2.04%
• Average Volume (3M): 13.72K
• Price to Earnings (P/E): 33.6
• Beta (1Y): 0.83
• Revenue Growth: 6.42%
• EPS Growth: 14.12%
• Country: DE
• Employees: 2,778
• Sector: Industrials
• Sector Strength: 93
• Industry: Industrial - Machinery
• EPS (TTM): 5.00
• Shares Outstanding: 11,370,000
• 10 Day Avg. Volume: 12,704
• 30 Day Avg. Volume: 13,723
• 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: €797.92
• Price Target Upside: 7.46% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 13

• 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

Rational reported a strong set of Q4 preliminary figures with revenue (€318.0m) 2% above and EBIT (€87.4m) 8% above consensus.

Financial Performance

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

Geographical Sales Growth

The outlook for FY25 is eagerly awaited as Rational's sales in North America have grown steadily in recent years and now account for over 23% of total sales.

Negative Factors

Operating Expenses

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

R&D Costs

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

Sales Performance in Asia

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

Rational Business Overview & Revenue Model

Company Description

Rational AG (RAA) is a leading global provider in the field of commercial kitchen equipment, specializing in the manufacturing and distribution of advanced cooking systems. The company primarily operates in the hospitality, catering, and food production industries, offering innovative solutions such as combi steamers and intelligent cooking appliances designed to enhance efficiency, productivity, and food quality in professional kitchens.

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
	EBIT
326.16M	323.61M	281.48M	238.26M	159.51M	103.12M
	EBITDA
364.40M	364.99M	317.96M	269.18M	189.82M	132.39M
	Net Income Common Stockholders
251.28M	250.53M	215.76M	185.72M	123.66M	80.10M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
391.28M	493.62M	402.67M	202.34M	246.38M	226.61M
	Total Assets
966.85M	1.11B	989.03M	899.22M	783.84M	670.75M
	Total Debt
28.08M	29.80M	28.08M	19.00M	19.59M	22.75M
	Net Debt
-97.52M	-114.37M	-109.88M	-182.22M	-226.12M	-203.11M
	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: 742.50
• 50DMA: Positive
• 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 742.5 is above the 20-day moving average (MA) of 735.28, above the 50-day MA of 729.51, and below the 200-day MA of 824.22, indicating a neutral trend. The MACD of -2.99 indicates Negative momentum. The RSI at 54.56 is Neutral, neither overbought nor oversold. The STOCH value of 78.78 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	77 Outperform	€4.52B	15.73	15.25%	1.82%	14.42%	26.41%
G1A	75 Outperform	€9.66B	25.63	16.56%	1.92%	1.79%	0.06%
RAA	72 Outperform	€8.36B	33.60	31.40%	2.04%	6.42%	14.12%
DUE	72 Outperform	€1.58B	15.26	4.78%	3.06%	-10.85%	-3.64%
JUN3	72 Outperform	€3.90B	13.50	12.41%	2.10%	-2.78%	-3.44%
Sector *	66 Neutral	$4.49B	12.28	5.32%	248.53%	4.08%	-12.00%
PFV	62 Neutral	€1.59B	42.24		4.54%	―	―