Ricardo (RCDO) AI Stock Analysis

• Market Cap: £265.65M
• Dividend Yield: 248.24%
• Average Volume (3M): 634.53K
• Price to Earnings (P/E): 205.4
• Beta (1Y): 0.14
• Revenue Growth: -8.12%
• EPS Growth: -794.85%
• Country: UK
• Employees: 2,559
• Sector: Industrials
• Sector Strength: 95
• Industry: Consulting Services
• EPS (TTM): N/A
• Shares Outstanding: 62,218,280
• 10 Day Avg. Volume: 173,167
• 30 Day Avg. Volume: 634,528
• PEG Ratio: -0.03
• Price to Book (P/B): 2.93
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 125.61
• 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: £434.00
• Price Target Upside: 1.64% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 0

• Rating: 62 Neutral
• Price Target: 449.00p ▲(5.15%Upside)

Ricardo's overall stock score is primarily driven by its strong technical analysis performance and positive corporate events. While the company shows resilience with steady revenue growth and effective cash management, low profitability margins and a negative P/E ratio weigh down the financial performance and valuation scores. The strategic acquisition by WSP Group and managerial equity alignment offer potential for enhanced market positioning and operational capabilities.

Positive Factors

Order Book and Intake

The order book has increased by 1.8% to £393m, with a notable 10.2% rise in order intake to £221.1m.

Revenue Growth Expectations

The group anticipates organic revenue growth in the mid-single digits annually, with underlying operating profit margins moving towards 10%.

Negative Factors

Cash Conversion

Cash conversion was weak, registering at only 13%.

Earnings Expectations

Ricardo issued a trading update indicating FY25E will fall below consensus expectations.

Impairment and Financial Challenges

Emerging A&I faced difficulties, leading to a £14m impairment.

Ricardo Business Overview & Revenue Model

Company Description

Ricardo 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 Money

Ricardo 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

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

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

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 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement
Total Revenue	474.70M	445.20M	380.20M	343.70M	352.00M
Gross Profit	134.60M	121.70M	125.00M	108.00M	113.20M
EBITDA	33.20M	17.80M	33.80M	26.50M	29.70M
Net Income	700.00K	-5.40M	8.60M	1.70M	-6.50M
Balance Sheet
Total Assets	428.80M	448.80M	418.80M	390.60M	426.50M
Cash, Cash Equivalents and Short-Term Investments	48.60M	49.80M	49.40M	42.00M	66.30M
Total Debt	130.70M	137.00M	109.20M	113.20M	169.00M
Total Liabilities	263.60M	272.20M	221.20M	207.80M	277.40M
Stockholders Equity	164.70M	176.20M	197.40M	182.60M	148.60M
Cash Flow
Free Cash Flow	14.60M	3.50M	29.50M	12.50M	-7.50M
Operating Cash Flow	25.90M	14.10M	43.60M	25.90M	23.70M
Investing Cash Flow	-8.00M	-22.80M	-23.90M	-18.30M	-32.70M
Financing Cash Flow	-10.80M	8.80M	-11.70M	-32.40M	32.00M

Ricardo Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 427.00
• 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 GB:RCDO, the sentiment is Positive. The current price of 427 is below the 20-day moving average (MA) of 428.30, above the 50-day MA of 381.50, and above the 200-day MA of 338.96, indicating a neutral trend. The MACD of 9.36 indicates Positive momentum. The RSI at 62.59 is Neutral, neither overbought nor oversold. The STOCH value of 36.97 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GB:RCDO.

Ricardo Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
RNWH	79 Outperform	£652.25M	14.41	22.62%	234.71%	3.23%	2.00%
GFRD	78 Outperform	£441.93M	11.16	35.97%	378.20%	22.39%	179.53%
COST	70 Outperform	£426.15M	14.01	13.45%	151.90%	-6.07%	41.18%
RST	67 Neutral	£372.43M	29.76	5.32%	194.43%	-0.65%	―
Sector *	65 Neutral	$11.18B	15.79	5.49%	1.92%	3.14%	-24.90%
RCDO	62 Neutral	£265.65M	205.36	-5.28%	248.24%	-8.12%	-794.85%
FIH	52 Neutral	£23.16M	―	-12.36%	67.57%	-22.37%	-192.17%

Ricardo Corporate Events

Ricardo PLC Enhances Managerial Equity Participation

Ricardo PLC, a company involved in various sectors, has announced the purchase of 152 shares under its Share Incentive Plan (SIP) for several of its managerial staff. This move, involving key personnel such as the Chief Financial Officer and the Global President of Clean Energy and Environmental Solutions, reflects the company’s ongoing commitment to align managerial interests with shareholder value. The transaction, executed by MUFG Corporate Markets Trustees, highlights the company’s strategic focus on incentivizing its leadership team through equity participation.

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.

Ricardo Shareholders Approve Acquisition by WSP Group

Ricardo PLC has announced that its shareholders have approved a final cash acquisition by WSP Group Limited, a subsidiary of WSP Global Inc., through a scheme of arrangement. This acquisition, which is expected to be completed by Q4 2025, marks a significant step in Ricardo’s strategic direction, potentially enhancing its market position and operational capabilities under WSP’s ownership.

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.

Ricardo PLC Experiences Significant Shareholder Change

Ricardo PLC, a UK-based company, has been notified of a significant change in its shareholder structure. Sand Grove Capital Management LLP has acquired financial instruments that give them 5.04% of the voting rights in Ricardo PLC, marking a notable shift in the company’s ownership dynamics. This acquisition could influence Ricardo’s strategic decisions and potentially impact its market position.

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.

Ricardo PLC Adjourns General Meeting Amid Acquisition Developments

Ricardo PLC announced the indefinite adjournment of a requisitioned general meeting initially called by Science Group PLC and Ropemaker Nominees Limited. This decision follows the withdrawal of the requisition notice by Science Group after the announcement of a cash acquisition by WSP Group Limited, which will acquire all issued and to be issued shares of Ricardo. The acquisition terms are set at 430 pence per share, with conditions allowing for potential price adjustments under specific circumstances.

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.

Ricardo PLC Proposes Adjournment of General Meeting Amid Acquisition Plans

Ricardo PLC has announced the proposed adjournment of a requisitioned general meeting initially called by Science Group plc and Ropemaker Nominees Limited. This decision follows the withdrawal of the requisition notice by Science Group after the announcement of a recommended cash acquisition by WSP Group Limited, a subsidiary of WSP Global Inc., which plans to acquire all issued and to be issued share capital of Ricardo. The acquisition terms are set at 430 pence per Ricardo share, with provisions for potential adjustments under specific conditions. This move is expected to significantly impact Ricardo’s operations and market positioning, as it aligns with WSP Global’s strategic interests. The Board advises shareholders not to attend the now unnecessary meeting, although they may do so if they wish.

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.

Ricardo PLC Announces Major Change in Shareholder Voting Rights

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.

Ricardo PLC Announces Change in Voting Rights Structure

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.

Ricardo Faces Boardroom Challenge Amidst Strong Financial Outlook

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.

Ricardo PLC Announces Share Purchases Under Incentive Plan

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.

Ricardo plc Faces Boardroom Challenge as General Meeting is Requisitioned

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.