Rheinmetall (RHM) AI Stock Analysis

• Market Cap: €80.93B
• Dividend Yield: 0.47%
• Average Volume (3M): 243.19K
• Price to Earnings (P/E): 93.9
• Beta (1Y): 0.68
• Revenue Growth: 31.24%
• EPS Growth: 52.48%
• Country: DE
• Employees: 29,515
• Sector: Industrials
• Sector Strength: 72
• Industry: Aerospace & Defense
• EPS (TTM): 3.02
• Shares Outstanding: 46,002,533
• 10 Day Avg. Volume: 250,890
• 30 Day Avg. Volume: 243,188
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• 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: €2,153.83
• Price Target Upside: 24.39% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 13

• Rating: 60 Neutral
• Price Target: €1,832.00 ▲(5.80% Upside)

Rheinmetall's overall stock score is driven by strong financial performance, despite concerns over cash flow. Technical indicators suggest a bearish trend, with the stock trading below key moving averages. The high P/E ratio indicates potential overvaluation, which, combined with a low dividend yield, impacts the valuation score negatively.

Positive Factors

Revenue Growth

Consistent revenue growth indicates Rheinmetall's ability to expand its market presence and adapt to evolving industry demands, supporting long-term business stability.

Profitability Margins

Strong profitability margins reflect Rheinmetall's efficient operations and pricing power, which are crucial for sustaining long-term financial health and competitive advantage.

Balance Sheet Health

A solid balance sheet with manageable leverage provides Rheinmetall with financial flexibility to invest in growth opportunities and withstand economic fluctuations.

Negative Factors

Free Cash Flow Decline

A sharp decline in free cash flow growth can limit Rheinmetall's ability to fund operations and invest in future growth, potentially impacting long-term financial stability.

Debt Increase

Rising debt levels could strain Rheinmetall's financial resources, increasing interest obligations and reducing flexibility to respond to market changes.

Cash Flow Performance

Mixed cash flow performance highlights potential challenges in generating sufficient cash from operations, which could affect Rheinmetall's capacity to sustain growth and manage liabilities.

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 through multiple streams primarily from its Defense and Automotive sectors. In the Defense segment, the company earns income by providing military equipment, such as armored vehicles, weapons systems, and munitions to government and military clients, often secured through long-term contracts and partnerships with defense ministries around the world. The Automotive sector contributes to revenue through the sale of automotive components, including engine and transmission parts, which are supplied to major automotive manufacturers. Additionally, Rheinmetall benefits from government defense budgets and spending on military modernization, as well as collaborations with other defense contractors and technology firms, enhancing its product offerings and market reach.

Rheinmetall Financial Statement Overview

Summary

Rheinmetall demonstrates strong financial health with robust revenue growth and profitability. The balance sheet is stable with manageable leverage, though the increase in debt should be monitored. Cash flow performance is mixed, with a significant drop in free cash flow growth, highlighting a potential area of concern.

Income Statement

Rheinmetall shows strong revenue growth with a TTM increase of 1.87% and consistent profitability margins. The gross profit margin remains robust at over 50%, and the net profit margin is stable around 7%. EBIT and EBITDA margins are healthy, indicating efficient operations. Overall, the income statement reflects a strong financial performance with steady growth and profitability.

Balance Sheet

The balance sheet reveals a solid equity base with a debt-to-equity ratio of 0.38 in the TTM, indicating manageable leverage. Return on equity is strong at 19.91%, reflecting effective use of equity to generate profits. The equity ratio is healthy, suggesting a stable financial structure. However, the increase in total debt over the years warrants monitoring.

Cash Flow

Cash flow analysis shows a significant decline in free cash flow growth at -73.74% in the TTM, which is a concern. However, the operating cash flow to net income ratio is reasonable, indicating that operating activities are generating sufficient cash relative to net income. The free cash flow to net income ratio is also healthy, but the recent decline in free cash flow growth needs attention.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	10.67B	9.75B	7.18B	6.41B	5.66B	5.88B
Gross Profit	5.47B	5.06B	3.94B	3.38B	3.03B	2.94B
EBITDA	1.89B	1.77B	1.23B	960.00M	867.00M	644.00M
Net Income	822.00M	717.00M	535.00M	474.00M	291.00M	1.00M
Balance Sheet
Total Assets	14.59B	14.34B	11.94B	8.09B	7.73B	7.27B
Cash, Cash Equivalents and Short-Term Investments	352.00M	1.25B	915.00M	696.00M	1.22B	1.04B
Total Debt	2.01B	2.42B	1.91B	972.00M	921.00M	1.02B
Total Liabilities	9.68B	9.88B	8.30B	5.01B	5.11B	5.21B
Stockholders Equity	4.46B	4.05B	3.32B	2.81B	2.42B	1.89B
Cash Flow
Free Cash Flow	385.00M	988.00M	345.00M	-175.00M	419.00M	216.00M
Operating Cash Flow	1.24B	1.72B	743.00M	174.00M	690.00M	453.00M
Investing Cash Flow	-1.25B	-1.17B	-1.18B	-534.00M	-462.00M	-188.00M
Financing Cash Flow	-168.00M	-234.00M	746.00M	-131.00M	-202.00M	-148.00M

Rheinmetall Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1731.50
• 50DMA: Negative
• 100DMA: Negative
• 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 Negative. The current price of 1731.5 is below the 20-day moving average (MA) of 1841.40, below the 50-day MA of 1813.66, and above the 200-day MA of 1522.98, indicating a neutral trend. The MACD of -33.92 indicates Positive momentum. The RSI at 40.71 is Neutral, neither overbought nor oversold. The STOCH value of 49.83 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	―	€20.93B	24.56	24.74%	0.58%	45.24%	―
8TRA	―	€13.24B	6.08	12.80%	6.34%	-2.98%	-14.55%
HAG	―	€10.49B	115.31	11.52%	0.52%	18.53%	73.20%
Sector *	―	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
ENR	―	$88.43B	89.95	9.35%	―	15.48%	70.73%
RHM	―	€80.93B	93.87	21.91%	0.47%	31.24%	52.48%
OHB	―	€2.25B	389.72	1.42%	0.55%	1.67%	-91.60%