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Ricardo PLC (GB:RCDO)
LSE:RCDO

Ricardo (RCDO) AI Stock Analysis

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GB

Ricardo

(LSE:RCDO)

Rating:64Neutral
Price Target:
332.00p
▼(-0.90%Downside)
Ricardo's overall score is driven by strong technical indicators and strategic corporate events. Financial performance is stable, but profitability challenges and governance risks weigh on the score.
Positive Factors
Acquisition Strategy
The acquisition of E3 increases exposure to environmental and energy transition solutions.
Business Strategy
The business is actively increasing its exposure to environmental and energy consulting, making the valuation relatively undemanding.
Order Intake
The order book is up by 1.8% to £393m, with a significant increase in order intake by 10.2% to £221.1m.
Negative Factors
Financial Performance
Cash conversion was weak at only 13%.
Leverage
Lower profit and higher net debt means pre-lease leverage is set to become elevated, limiting strategic options.
Profitability
Operating profit in the key EE division is expected to be broadly flat year-on-year, which is an underwhelming performance.

Ricardo (RCDO) vs. iShares MSCI United Kingdom ETF (EWC)

Ricardo Business Overview & Revenue Model

Company DescriptionRicardo plc provides engineering, technical, environmental, and strategic consultancy services for transportation original equipment manufacturers and operators, suppliers, energy companies, and government agencies. It operates through five segments: Energy & Environment (EE), Rail, Automotive and Industrial (A&I), Defense, and Performance Products (PP). The EE segment provides industry-leading analysis, advice, and data to governments, public agencies, and businesses. The Rail segment offers technical advice and engineering services, and accredited assurance services. The A&I segment engages in the provision of clean, efficient, integrated propulsion, and energy solutions in area of hybrid and electric systems, electrification, engines, driveline and transmissions, testing, and vehicle engineering for automotive, aerospace, defense, energy, off-highway and commercial, marine, motorcycle and light-personal transport, and rail sectors. The Defense segment focuses on engineering services, software, and products that protect life and enhance the operation, maintenance, and support of complex systems, as well as offers various engineering programmes; and anti-lock braking system/electronic stability control systems. The PP segment manufactures and assembles niche high-quality components, prototypes, and complex products, including engines, transmissions, and other precision and performance-critical products; and provides software solutions for motorsport, automotive, aerospace, defense, and rail markets. It operates in the United Kingdom, Europe, North America, China, Australia, rest of Asia, and internationally. The company was founded in 1915 and is headquartered in Shoreham-by-Sea, the United Kingdom.
How the Company Makes MoneyRicardo makes money through a diversified revenue model that includes consultancy fees, project-based contracts, and engineering services. The company's key revenue streams come from delivering tailored solutions and expertise in areas such as emissions reduction, energy efficiency, and sustainable transport. Significant partnerships with industry leaders and government bodies enhance its reputation and expand its market reach. Ricardo's revenue is also bolstered by its ongoing investment in research and development, which allows it to offer innovative solutions and maintain a competitive edge in its sectors.

Ricardo Financial Statement Overview

Summary
Ricardo's financial performance showcases steady revenue growth and improved cash flow generation, indicating resilience in its business model. However, persistent low profitability margins and declining equity pose challenges. The balance sheet is moderately leveraged, and strong cash flow ratios suggest effective cash management, but overall financial health is tempered by low returns on equity.
Income Statement
55
Neutral
Ricardo's revenue has shown a steady growth trajectory, with a revenue growth rate of 6.6% from 2023 to 2024. However, the company's net profit margin remains weak at 0.15% in 2024, despite improvements from previous losses. Gross profit margin remains stable at approximately 28.3% in 2024. EBIT and EBITDA margins are relatively low at 2.7% and 7.0% respectively, indicating moderate operational efficiency.
Balance Sheet
60
Neutral
The company's balance sheet shows a reasonable debt-to-equity ratio of 0.79 in 2024, suggesting moderate leverage. However, a declining stockholders' equity from 2023 to 2024 indicates potential risks. The equity ratio stands at 38.4%, reflecting a stable but slightly weakened position. Return on equity is low at 0.42%, highlighting challenges in generating returns for shareholders.
Cash Flow
65
Positive
Ricardo demonstrates solid cash flow management with a significant increase in free cash flow from 2023 to 2024, achieving a growth rate of 317.1%. The operating cash flow to net income ratio is notably high at 37, indicating strong cash conversion from operations. However, the free cash flow to net income ratio is also high at 20.86, reinforcing positive cash flow dynamics despite net income challenges.
Breakdown
Jun 2024Jun 2023Jun 2022Jun 2021Jun 2020
Income StatementTotal Revenue
474.70M445.20M380.20M343.70M352.00M
Gross Profit
134.60M121.70M125.00M108.00M113.20M
EBIT
12.80M40.80M18.10M9.20M-2.30M
EBITDA
33.20M17.80M33.80M26.50M29.70M
Net Income Common Stockholders
700.00K-5.40M8.60M1.70M-6.50M
Balance SheetCash, Cash Equivalents and Short-Term Investments
48.60M49.80M49.40M42.00M66.30M
Total Assets
428.80M448.80M418.80M390.60M426.50M
Total Debt
130.70M137.00M109.20M113.20M169.00M
Net Debt
82.10M87.20M59.80M71.20M102.70M
Total Liabilities
263.60M272.20M221.20M207.80M277.40M
Stockholders Equity
164.70M176.20M197.40M182.60M148.60M
Cash FlowFree Cash Flow
14.60M3.50M29.50M12.50M-7.50M
Operating Cash Flow
25.90M14.10M43.60M25.90M23.70M
Investing Cash Flow
-8.00M-22.80M-23.90M-18.30M-32.70M
Financing Cash Flow
-10.80M8.80M-11.70M-32.40M32.00M

Ricardo Technical Analysis

Technical Analysis Sentiment
Positive
Last Price335.00
Price Trends
50DMA
261.28
Positive
100DMA
259.81
Positive
200DMA
343.53
Negative
Market Momentum
MACD
15.65
Negative
RSI
78.69
Negative
STOCH
98.58
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:RCDO, the sentiment is Positive. The current price of 335 is above the 20-day moving average (MA) of 284.65, above the 50-day MA of 261.28, and below the 200-day MA of 343.53, indicating a neutral trend. The MACD of 15.65 indicates Negative momentum. The RSI at 78.69 is Negative, neither overbought nor oversold. The STOCH value of 98.58 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GB:RCDO.

Ricardo Peers Comparison

Overall Rating
UnderperformOutperform
Sector (66)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
79
Outperform
£351.08M11.4013.45%1.93%-6.07%41.18%
78
Outperform
£653.04M14.4322.62%2.30%3.23%2.00%
77
Outperform
£401.04M10.1935.97%4.15%22.39%179.53%
GBRST
68
Neutral
£340.94M27.245.32%2.15%-0.65%
66
Neutral
$4.49B12.345.40%248.65%4.13%-12.33%
64
Neutral
£192.86M205.36-5.28%3.42%-8.12%-794.85%
GBFIH
52
Neutral
£23.16M-7.06%0.65%-22.37%-192.17%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
GB:RCDO
Ricardo
335.00
-139.68
-29.43%
GB:COST
Costain
128.60
48.08
59.71%
GB:FIH
FIH Group plc
185.00
-54.46
-22.74%
GB:GFRD
Galliford Try
411.00
183.47
80.64%
GB:RNWH
Renew Holdings plc
831.00
-221.52
-21.05%
GB:RST
Restore
253.50
-10.51
-3.98%

Ricardo Corporate Events

Business Operations and StrategyRegulatory Filings and Compliance
Ricardo PLC Announces Major Change in Shareholder Voting Rights
Neutral
Jun 11, 2025

Ricardo PLC has announced a significant change in its shareholder structure, with Science Group plc acquiring or disposing of voting rights, resulting in a decrease of their voting rights from 21.758273% to 0.151030%. This shift could impact Ricardo’s governance and strategic decisions, potentially affecting its market positioning and stakeholder interests.

The most recent analyst rating on (GB:RCDO) stock is a Hold with a £280.00 price target. To see the full list of analyst forecasts on Ricardo stock, see the GB:RCDO Stock Forecast page.

M&A TransactionsBusiness Operations and Strategy
Ricardo PLC Announces Change in Voting Rights Structure
Neutral
May 28, 2025

Ricardo PLC has announced a change in its voting rights structure following the acquisition of shares by Science Group plc. The acquisition has increased Science Group’s voting rights in Ricardo PLC to 21.76%, up from 20.08%, indicating a significant shift in shareholder influence that could impact future company decisions and stakeholder interests.

The most recent analyst rating on (GB:RCDO) stock is a Hold with a £280.00 price target. To see the full list of analyst forecasts on Ricardo stock, see the GB:RCDO Stock Forecast page.

Executive/Board ChangesShareholder MeetingsFinancial Disclosures
Ricardo Faces Boardroom Challenge Amidst Strong Financial Outlook
Neutral
May 21, 2025

Ricardo plc has announced the publication of a circular to shareholders regarding a requisitioned general meeting to consider the removal of Mark Clare as a director and Chairman of the Board. The Board unanimously recommends shareholders vote against this resolution, asserting it is not in the best interests of the company or its shareholders. Despite this internal challenge, Ricardo remains confident in its financial performance for FY24/25, with a high percentage of net and gross revenue already secured, indicating stability and continued growth in its consulting businesses.

The most recent analyst rating on (GB:RCDO) stock is a Hold with a £280.00 price target. To see the full list of analyst forecasts on Ricardo stock, see the GB:RCDO Stock Forecast page.

Business Operations and Strategy
Ricardo PLC Announces Share Purchases Under Incentive Plan
Neutral
May 20, 2025

Ricardo PLC, a company involved in various sectors, recently announced the purchase of 242 shares under its Share Incentive Plan (SIP) by key managerial personnel. This transaction, which involved deductions from the individuals’ gross salaries, highlights the company’s commitment to aligning employee interests with corporate performance. The purchase was conducted on the London Stock Exchange, reflecting Ricardo’s ongoing efforts to enhance stakeholder engagement and maintain transparency in its operations.

The most recent analyst rating on (GB:RCDO) stock is a Hold with a £280.00 price target. To see the full list of analyst forecasts on Ricardo stock, see the GB:RCDO Stock Forecast page.

Executive/Board ChangesShareholder Meetings
Ricardo plc Faces Boardroom Challenge as General Meeting is Requisitioned
Neutral
May 1, 2025

Ricardo plc has announced that Science Group plc has requested a General Meeting to consider the removal of Mark Clare as a director and Chairman of the Board. The Board of Ricardo will convene the meeting in accordance with statutory timelines and advises shareholders to take no action at this time.

DividendsRegulatory Filings and Compliance
Ricardo PLC Awards Dividend Shares and Reinforces Transparency
Neutral
Apr 23, 2025

Ricardo PLC, a company involved in various sectors, announced the award of dividend shares under its Share Incentive Plan (SIP) to several key managerial personnel. This move reflects the automatic reinvestment of dividends received by these individuals. Additionally, the company’s CEO, Graham Ritchie, purchased shares as part of an automatic dividend reinvestment. These transactions are part of Ricardo’s compliance with the EU Market Abuse Regulation, ensuring transparency in managerial shareholdings.

Business Operations and StrategyFinancial Disclosures
Ricardo PLC Reports Strong Financial Performance and Strategic Progress
Positive
Apr 22, 2025

Ricardo PLC has announced a positive financial and strategic update, indicating strong performance and strategic initiatives aimed at creating shareholder value. Despite recent market uncertainties, the company expects to meet analyst expectations for FY24/25, supported by secured revenues and cost-saving measures. Ricardo is focusing on enhancing collaboration between business units and continuing its portfolio transformation towards environmental and energy solutions. The company has achieved significant cost reductions and improved efficiency, with plans for further savings in FY25/26, ensuring a robust financial outlook.

Business Operations and Strategy
Science Group Increases Stake in Ricardo PLC
Positive
Apr 8, 2025

Ricardo PLC has announced a change in its major holdings, with Science Group plc increasing its voting rights from 19.086420% to 20.078702%. This acquisition of voting rights signifies a strategic move by Science Group plc, potentially impacting Ricardo’s governance and future strategic decisions. The increase in holdings may influence Ricardo’s market positioning and stakeholder interests, as it reflects a heightened level of confidence and investment from Science Group plc.

M&A TransactionsBusiness Operations and Strategy
Ricardo PLC Announces Change in Voting Rights Structure
Neutral
Apr 4, 2025

Ricardo PLC has announced a change in its voting rights structure following an acquisition by Science Group plc, which now holds 19.086% of the voting rights, up from a previous 17.324%. This change in shareholding could impact Ricardo’s strategic direction and influence its decision-making processes, potentially affecting stakeholders and the company’s market positioning.

Business Operations and StrategyRegulatory Filings and Compliance
Ricardo PLC Announces Change in Major Holdings
Neutral
Apr 1, 2025

Ricardo PLC has announced a change in its major holdings, with Gresham House Asset Management Limited increasing its voting rights in the company to 23.18%, up from a previous 22.50%. This acquisition of voting rights signifies a strengthened position for Gresham House within Ricardo, potentially impacting the company’s strategic decisions and shareholder dynamics.

Business Operations and StrategyRegulatory Filings and Compliance
Ricardo PLC Announces Change in Major Shareholder Holdings
Neutral
Mar 31, 2025

Ricardo PLC has announced a change in its major holdings, with Science Group plc acquiring a significant portion of voting rights, now holding 17.32% of the total. This acquisition marks an increase from a previous position of 16.13%, potentially impacting Ricardo’s strategic decisions and stakeholder interests.

Executive/Board ChangesM&A TransactionsBusiness Operations and StrategyFinancial Disclosures
Ricardo plc Resists Board Changes Amid Strategic Shift to Energy Solutions
Neutral
Mar 28, 2025

Ricardo plc has rejected demands from Science Group plc to replace its Chairman, Mark Clare, amidst Science Group’s increasing stake in the company. The Board of Ricardo believes these actions are not in the best interest of its shareholders. Despite facing market challenges, Ricardo has been making strategic shifts towards environmental and energy transition solutions, including divesting its Defense segment and acquiring E3 Advisory Pty Ltd. The company has reported strong order intakes and improved financial performance, with a focus on long-term sustainable growth in its Energy & Environment and Rail segments.

Business Operations and Strategy
Science Group plc Increases Stake in Ricardo PLC
Neutral
Mar 19, 2025

Ricardo PLC has announced a change in its major holdings, with Science Group plc increasing its voting rights from 15.19% to 16.13%. This acquisition of voting rights signifies a strengthened influence of Science Group plc within Ricardo PLC, potentially impacting the company’s strategic decisions and stakeholder dynamics.

Executive/Board ChangesRegulatory Filings and Compliance
Ricardo PLC Announces Share Vesting for Chief Strategy Officer
Neutral
Mar 19, 2025

Ricardo PLC announced the vesting of 8,000 ordinary shares to Mike Bell, Chief Strategy and Digital Officer, under its 2020 Long Term Incentive Plan. This vesting, which was not subject to performance conditions, resulted in Bell realizing value from 3,760 shares at £2.48 each, increasing his total shareholding to 10,592 shares, representing 0.017% of the company’s issued share capital. This transaction aligns with the company’s obligations under the EU Market Abuse Regulation, potentially impacting the company’s governance transparency and shareholder value.

Executive/Board ChangesBusiness Operations and Strategy
Ricardo Faces Board Challenge from Science Group
Negative
Mar 17, 2025

Ricardo plc is currently facing a strategic challenge from Science Group plc, which has been increasing its shareholding and intends to replace Ricardo’s Board directors without offering a premium for control. This move is seen as a distraction for Ricardo, which is focused on executing its strategy to improve business operations and deliver value to shareholders. The Board of Ricardo is committed to acting in the best interests of the company and plans to share further details with shareholders.

Executive/Board ChangesBusiness Operations and Strategy
Ricardo Rejects Science Group’s Board Restructuring Demands
Negative
Mar 14, 2025

Ricardo plc has rejected demands from Science Group, which holds a 15.2% stake in the company, to replace key board members with their nominees. The Board views these demands as an attempt by Science Group to gain control without paying a takeover premium, especially as Ricardo is focused on simplifying operations and enhancing its focus on environmental and energy transition solutions. The Board believes Science Group’s actions could disrupt Ricardo’s strategic initiatives and potentially lead to governance non-compliance. Ricardo’s Board urges shareholders to reject Science Group’s demands, citing past aggressive tactics by Science Group in other takeovers.

Business Operations and Strategy
Ricardo PLC Announces Change in Major Holdings
Neutral
Mar 14, 2025

Ricardo PLC has announced a change in its major holdings, with Science Group plc acquiring a significant portion of voting rights, now holding 15.186874% of the total. This acquisition marks an increase from their previous position of 14.183925%, potentially impacting Ricardo’s strategic decisions and stakeholder dynamics.

Business Operations and Strategy
Ricardo PLC Enhances Managerial Stake with Share Incentive Plan
Positive
Mar 12, 2025

Ricardo PLC announced the purchase of 295 shares under its Share Incentive Plan (SIP) for several key managerial personnel. This transaction, conducted on the London Stock Exchange, reflects the company’s commitment to aligning managerial interests with shareholder value, potentially impacting its market positioning and stakeholder relations.

Business Operations and Strategy
Science Group Increases Stake in Ricardo PLC
Neutral
Mar 11, 2025

Ricardo PLC has announced that Science Group plc has increased its voting rights in the company from 12.009165% to 14.183925% as of March 11, 2025. This acquisition of voting rights could potentially influence Ricardo’s strategic decisions and impact its market positioning, reflecting a significant interest from Science Group plc in Ricardo’s operations.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.