Rheinmetall (RHM) AI Stock Analysis

• Market Cap: €69.73B
• Dividend Yield: 0.53%
• Average Volume (3M): 243.19K
• Price to Earnings (P/E): 101.5
• Beta (1Y): 0.96
• Revenue Growth: 24.61%
• EPS Growth: 45.20%
• Country: DE
• Employees: 29,515
• Sector: Industrials
• Sector Strength: 72
• Industry: Aerospace & Defense
• EPS (TTM): 14.06
• Shares Outstanding: 46,516,640
• 10 Day Avg. Volume: 250,890
• 30 Day Avg. Volume: 243,188
• PEG Ratio: -14.82
• Price to Book (P/B): 14.09
• Price to Sales (P/S): 7.11
• P/FCF Ratio: 49.94
• 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: €2,101.50
• Price Target Upside: 39.82% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 12
• EPS Forecast (FY): 39.62
• Revenue Forecast (FY): €14.64B

• Rating: 62 Neutral
• Price Target: €1,722.00 ▲(14.57% Upside)
• Action: Reiterated Date: 03/17/26
• Date: Action: Reiterated 03/17/26

The score is driven by strong financial performance (improving profitability, stronger balance sheet, and robust free cash flow), but is held back by weak technicals (below key moving averages with negative MACD) and an expensive valuation (high P/E with a low dividend yield).

Positive Factors

Strong cash generation

Robust OCF (~€2.29B) and FCF (~€1.41B) in 2025 provide durable internal funding for capex, R&D, M&A and debt reduction. Sustained cash generation enhances financial flexibility, supports multi‑year service contracts and strengthens resilience against cyclical shocks.

Improved balance sheet / deleveraging

Marked debt reduction and meaningful equity growth increase solvency and lower refinancing risk. Improved leverage capacity strengthens the company’s ability to bid on large multi‑year defense contracts and fund strategic investments without heavy reliance on external financing.

Strategic positioning and growth guidance

Management’s 2026 guidance and creation of a Naval Systems division signal structural expansion into adjacent domains. Large growth and margin targets, plus acquisitions and partnerships, indicate a stronger long‑term addressable market and improved ability to capture rising European defense spend.

Negative Factors

2025 revenue decline

A near‑10% revenue drop in 2025 reflects demand or delivery timing weakness that reduces backlog visibility. Revenue contraction can compress operating leverage, complicate predictable free cash flow conversion, and weaken near‑term momentum for multi‑year planning.

Missing / inconsistent 2025 metrics

Key 2025 profitability and ratio gaps reduce transparency and hinder comparability. Without consistent gross‑profit and return metrics it is harder to validate margin sustainability, working‑capital trends and the durability of recent cash‑flow improvements for medium‑term modelling.

Exposure to procurement and automotive cycles

Revenue and order timing are structurally tied to government procurement cycles and automotive demand. That creates lumpy order intake and sensitivity to budget/timing shifts, leaving the business exposed to medium‑term volatility despite strong underlying demand drivers.

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 makes money mainly by designing, manufacturing, and supporting defense equipment and by supplying technology products to industrial and automotive customers. Its core revenue streams include: (1) Defense platforms and systems sales: revenue from delivering land systems such as armored vehicles, combat support vehicles, turrets, and mission equipment to government and military customers, typically under multi-year procurement contracts. (2) Weapons and ammunition: recurring revenue from the production and sale of munitions (including large- and medium-caliber ammunition) and weapon systems, often benefiting from repeat orders driven by training consumption, stockpile replenishment, and sustained operational demand. (3) Electronics, sensors, and air defense-related solutions: revenue from selling and integrating sensors, effectors, and command-and-control/digital battlefield solutions, including upgrades and integration work tied to broader platform programs. (4) Services, maintenance, and lifecycle support: revenue from spare parts, repairs, overhauls, upgrades, training, and long-term support agreements that extend beyond initial delivery and can provide multi-year, higher-visibility cash flows. (5) Automotive/industrial technology: revenue from supplying components and systems (e.g., for propulsion, thermal management, emissions-related or energy-related applications) to OEMs and industrial customers, generally under supply agreements linked to production volumes. Key factors that influence earnings include the level and timing of government defense budgets and procurement decisions, contract mix (new production vs. modernization and services), delivery schedules on large programs, and demand cycles in automotive and industrial end markets. Significant partnerships or specific contract counterparties: null.

Rheinmetall Financial Statement Overview

Summary

Overall financial quality is strong: margins improved materially versus 2020, the balance sheet strengthened with higher equity and sharply lower debt in 2025, and cash flow generation is robust (2025 OCF/FCF up vs 2024). The main offset is the 2025 revenue decline (-9.7%) and some missing/inconsistent 2025 ratio fields, which reduce near-term visibility.

Income Statement

Profitability is solid and improving versus earlier years: operating margin expanded from ~6.7% (2020) to ~14.0% (2024), and net margin has stabilized around ~7% since 2021 after near-breakeven in 2020. Revenue grew strongly from 2021–2024, but the latest year (2025) shows a notable revenue decline (-9.7%) and gross profit margin is unavailable/appears inconsistent in 2025 data, which adds uncertainty to near-term momentum.

Balance Sheet

Leverage looks manageable with debt-to-equity around ~0.58–0.60 in 2023–2024, and equity has grown meaningfully over time (from ~€1.9B in 2020 to ~€4.1B in 2024, and ~€5.0B in 2025). Total debt fell sharply in 2025 (to ~€1.28B from ~€2.42B in 2024), strengthening the balance sheet, though several 2025 ratios (e.g., debt-to-equity, return on equity) are missing/zeroed, limiting full comparability.

Cash Flow

Cash generation is a standout: operating cash flow and free cash flow have ramped materially, reaching ~€2.29B and ~€1.41B in 2025 versus ~€1.72B and ~€0.99B in 2024. The business recovered from a weak 2022 cash profile (negative free cash flow) to consistently strong free cash flow, supporting flexibility for reinvestment and balance-sheet improvement. A watch item is that free cash flow remains below net income in recent years (roughly ~0.57–0.62× in 2024–2025), suggesting some earnings are still tied up in working capital/capex.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	9.94B	9.75B	7.18B	6.41B	5.66B
Gross Profit	5.20B	5.06B	3.94B	3.38B	3.03B
EBITDA	2.19B	1.77B	1.23B	960.00M	850.00M
Net Income	696.00M	717.00M	535.00M	474.00M	291.00M
Balance Sheet
Total Assets	17.08B	14.34B	11.94B	8.09B	7.73B
Cash, Cash Equivalents and Short-Term Investments	1.69B	1.25B	915.00M	696.00M	1.22B
Total Debt	1.28B	2.42B	1.91B	972.00M	921.00M
Total Liabilities	11.46B	9.88B	8.30B	5.01B	5.11B
Stockholders Equity	5.01B	4.05B	3.32B	2.81B	2.42B
Cash Flow
Free Cash Flow	1.41B	988.00M	345.00M	-175.00M	419.00M
Operating Cash Flow	2.29B	1.72B	743.00M	174.00M	690.00M
Investing Cash Flow	-843.00M	-1.17B	-1.18B	-534.00M	-462.00M
Financing Cash Flow	-861.00M	-234.00M	746.00M	-131.00M	-202.00M

Rheinmetall Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1503.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• 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 Negative. The current price of 1503 is below the 20-day moving average (MA) of 1614.53, below the 50-day MA of 1699.54, and below the 200-day MA of 1721.02, indicating a bearish trend. The MACD of -32.72 indicates Positive momentum. The RSI at 39.03 is Neutral, neither overbought nor oversold. The STOCH value of 29.89 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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	€16.51B	18.80	29.86%	0.62%	45.24%	―
ENR	74 Outperform	€119.91B	38.10	18.13%	―	13.38%	22.22%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
OHB	63 Neutral	€4.97B	41.39	1.53%	0.51%	10.80%	-91.79%
RHM	62 Neutral	€69.73B	101.47	19.04%	0.53%	24.61%	45.20%
HAG	59 Neutral	€8.61B	95.25	14.37%	0.68%	14.89%	619.09%
8TRA	52 Neutral	€14.50B	9.86	8.55%	5.67%	-7.11%	-30.83%