Rheinmetall (RHM) AI Stock Analysis

• Market Cap: €81.74B
• Dividend Yield: 0.53%
• Average Volume (3M): 243.19K
• Price to Earnings (P/E): 93.8
• Beta (1Y): 0.99
• Revenue Growth: 24.61%
• EPS Growth: 45.20%
• Country: DE
• Employees: 29,515
• Sector: Industrials
• Sector Strength: 72
• Industry: Aerospace & Defense
• EPS (TTM): 3.30
• Shares Outstanding: 46,002,533
• 10 Day Avg. Volume: 250,890
• 30 Day Avg. Volume: 243,188
• PEG Ratio: 1.22
• Price to Book (P/B): 6.10
• Price to Sales (P/S): 2.53
• P/FCF Ratio: 25.01
• 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: €2,192.70
• Price Target Upside: 23.08% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 11
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 63 Neutral
• Price Target: €1,845.00 ▲(3.56% Upside)

Rheinmetall's strong financial performance is offset by technical indicators suggesting a bearish trend and a high P/E ratio indicating potential overvaluation. The decline in free cash flow growth is a notable risk, while the lack of earnings call data and corporate events limits further insights.

Positive Factors

Robust revenue growth

Sustained ~24.6% revenue growth reflects strong demand across Defense and Automotive businesses and expanding order intake. Over 2–6 months this underpins durable top‑line momentum, supports reinvestment in R&D and backlog conversion into future cash flows.

High profit margins

Robust gross and operating margins indicate structural pricing power and efficient production, especially in high‑value defense products. Margin sustainability supports cash generation and resilience through cyclical automotive demand shifts over the medium term.

Manageable leverage and strong ROE

Moderate leverage with strong 20% ROE provides financial flexibility to fund capital expenditures, R&D and strategic wins. A balanced capital structure supports long‑term investment in product development and the ability to pursue acquisitions or scale production.

Negative Factors

Sharp free cash flow decline

A 74.5% decline in FCF growth is a durable warning: it constrains ability to self‑fund capex, repay debt, or return capital. If structural, it increases dependency on external financing or working capital improvements to support growth and defense contract execution.

Weak cash conversion

Low cash conversion (OCF/Net Income 0.17) indicates earnings are not translating into cash efficiently, raising risk around liquidity and funding cycles. Over months this can pressure working capital and limit ability to absorb contract timing variances or higher capex.

Concentration in government contracts

Heavy reliance on defense and government contracts concentrates revenue on political budgets and procurement cycles. While stable when funded, this exposes the company to policy shifts, multi‑year tender volatility and long sales cycles that can affect cash visibility.

Rheinmetall Business Overview & Revenue Model

Company Description

Rheinmetall AG provides technologies to the mobility and security sectors worldwide. The company operates in five segments: Vehicle Systems, Weapon and Ammunition, Electronic Solutions, Sensors and Actuators, and Materials and Trade. The Vehicle Systems segment offers combat, support, logistics, and special vehicles, including armored tracked vehicles, CBRN protection systems, turret systems, and wheeled logistics and tactical vehicles. The Weapon and Ammunition segment provides threat-appropriate, effective and accurate firepower, and protection solutions, such as large and medium-caliber weapons and ammunition, weapon stations, protection systems, and propellants and powders. The Electronic Solutions segment offers a chain of systems network, such as sensors, networking platforms, automated connected effectors for soldiers, and cyberspace protection solutions, and training and simulation solutions. Its products include air defense systems; soldier systems; command, control, and reconnaissance systems; fire control systems; sensors; and simulations for the army, air force, navy, and civil applications. The Sensors and Actuators segment provides a portfolio of products comprising exhaust gas recirculation systems; throttle valves, control dampers, and exhaust flaps for electromotors; solenoid valves; actuators and valve train systems; oil, water, and vacuum pumps for passenger cars, commercial vehicles, and light and heavy-duty off-road applications; and industrial solutions. The Materials and Trade segment focuses on the development of system components for the basic motors, such as engine blocks, structural components, and cylinder heads; plain bearings, and bushes; and replacement parts. It also engages in the aftermarket activities. The company was formerly known as Rheinmetall Berlin AG and changed its name to Rheinmetall AG in 1996. Rheinmetall AG was founded in 1889 and is headquartered in Düsseldorf, Germany.

How the Company Makes Money

Rheinmetall generates revenue primarily through the sale of defense products and automotive components. The Defense sector is a significant revenue driver, benefiting from government contracts for military equipment, including armored vehicles, artillery systems, and munitions. The Automotive division earns income by supplying parts and systems to major automotive manufacturers, focusing on engine management and emission control technologies. Additionally, Rheinmetall engages in partnerships with defense ministries and private sector entities, enhancing its market presence and securing long-term contracts. The company's ongoing investment in research and development further positions it to capitalize on emerging technologies, contributing to sustained revenue growth.

Rheinmetall Financial Statement Overview

Summary

Rheinmetall shows strong revenue growth and profitability, with a solid balance sheet and manageable leverage. However, the significant decline in free cash flow growth is a concern that needs addressing for long-term stability.

Income Statement

Rheinmetall has demonstrated consistent revenue growth with a 3.06% increase in TTM. The company maintains strong profitability with a gross profit margin of 51.3% and a net profit margin of 7.7%. EBIT and EBITDA margins are healthy at 13.4% and 17.7%, respectively, indicating efficient operations. Overall, the income statement reflects robust financial health and growth potential.

Balance Sheet

The balance sheet shows a moderate debt-to-equity ratio of 0.45, suggesting manageable leverage. The return on equity is strong at 20.1%, indicating effective use of equity to generate profits. The equity ratio stands at 29.8%, reflecting a stable financial structure. While the company is well-capitalized, maintaining this balance will be crucial for future stability.

Cash Flow

The cash flow statement reveals challenges with a significant decline in free cash flow growth by 74.5% in TTM. However, the operating cash flow to net income ratio is 0.17, and the free cash flow to net income ratio is 0.31, indicating some efficiency in cash generation relative to net income. Improving cash flow stability will be essential for long-term financial health.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	11.00B	9.75B	7.18B	6.41B	5.66B	5.88B
Gross Profit	4.92B	5.06B	3.94B	3.38B	3.03B	2.94B
EBITDA	1.96B	1.77B	1.23B	960.00M	850.00M	644.00M
Net Income	840.00M	717.00M	535.00M	474.00M	291.00M	1.00M
Balance Sheet
Total Assets	15.66B	14.34B	11.94B	8.09B	7.73B	7.27B
Cash, Cash Equivalents and Short-Term Investments	557.00M	1.25B	915.00M	696.00M	1.22B	1.04B
Total Debt	2.43B	2.42B	1.91B	972.00M	921.00M	1.02B
Total Liabilities	10.51B	9.88B	8.30B	5.01B	5.11B	5.21B
Stockholders Equity	4.67B	4.05B	3.32B	2.81B	2.42B	1.89B
Cash Flow
Free Cash Flow	98.00M	988.00M	345.00M	-175.00M	419.00M	216.00M
Operating Cash Flow	1.01B	1.72B	743.00M	174.00M	690.00M	453.00M
Investing Cash Flow	-1.36B	-1.17B	-1.18B	-534.00M	-462.00M	-188.00M
Financing Cash Flow	447.00M	-234.00M	746.00M	-131.00M	-202.00M	-148.00M

Rheinmetall Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 1781.50
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DE:RHM, the sentiment is Neutral. The current price of 1781.5 is below the 20-day moving average (MA) of 1847.15, above the 50-day MA of 1665.34, and above the 200-day MA of 1729.04, indicating a neutral trend. The MACD of 37.44 indicates Positive momentum. The RSI at 50.00 is Neutral, neither overbought nor oversold. The STOCH value of 27.56 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for DE:RHM.

Rheinmetall Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MTX	76 Outperform	€20.14B	23.64	24.74%	0.62%	45.24%	―
ENR	72 Outperform	$123.15B	88.13	14.04%	―	13.38%	22.22%
8TRA	68 Neutral	€16.47B	9.26	10.20%	5.67%	-7.11%	-30.83%
HAG	68 Neutral	€9.66B	77.92	15.96%	0.68%	14.89%	619.09%
RHM	63 Neutral	€81.74B	93.79	21.48%	0.53%	24.61%	45.20%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
OHB	59 Neutral	€5.72B	932.04	1.49%	0.51%	10.80%	-91.79%