tiprankstipranks
Trending News
More News >
Ricardo PLC (GB:RCDO)
LSE:RCDO

Ricardo (RCDO) AI Stock Analysis

Compare
17 Followers

Top Page

GB

Ricardo

(LSE:RCDO)

Rating:53Neutral
Price Target:
434.00p
▲(1.64%Upside)
Ricardo's overall stock score is primarily driven by solid financial performance and cash flow management. However, technical analysis suggests caution due to overbought conditions, and valuation concerns persist with a negative P/E ratio. Corporate events add complexity with both strategic progress and governance challenges.
Positive Factors
Acquisition Strategy
The acquisition of E3 enhances exposure to environmental and energy transition solutions, indicating strategic growth in high-demand areas.
Order Book and Intake
The order book increased by 1.8% to £393m, with order intake rising by 10.2% to £221.1m, indicating strong demand.
Valuation
The company's active increase in environmental and energy consulting exposure makes its valuation relatively undemanding.
Negative Factors
Earnings Expectations
Ricardo's 1H trading update indicated that FY25E will be below consensus expectations, potentially impacting investor confidence.
Financial Performance
The business experienced weak cash conversion at only 13%, highlighting challenges in financial efficiency.
Leverage and Debt
Lower profit and higher net debt are set to elevate pre-lease leverage, limiting the company's strategic options.

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.
BreakdownJun 2024Jun 2023Jun 2022Jun 2021Jun 2020
Income Statement
Total Revenue474.70M445.20M380.20M343.70M352.00M
Gross Profit134.60M121.70M125.00M108.00M113.20M
EBITDA33.20M17.80M33.80M26.50M29.70M
Net Income700.00K-5.40M8.60M1.70M-6.50M
Balance Sheet
Total Assets428.80M448.80M418.80M390.60M426.50M
Cash, Cash Equivalents and Short-Term Investments48.60M49.80M49.40M42.00M66.30M
Total Debt130.70M137.00M109.20M113.20M169.00M
Total Liabilities263.60M272.20M221.20M207.80M277.40M
Stockholders Equity164.70M176.20M197.40M182.60M148.60M
Cash Flow
Free Cash Flow14.60M3.50M29.50M12.50M-7.50M
Operating Cash Flow25.90M14.10M43.60M25.90M23.70M
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 Price427.00
Price Trends
50DMA
330.74
Positive
100DMA
282.54
Positive
200DMA
339.18
Positive
Market Momentum
MACD
31.22
Positive
RSI
69.15
Neutral
STOCH
25.34
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 above the 20-day moving average (MA) of 423.15, above the 50-day MA of 330.74, and above the 200-day MA of 339.18, indicating a bullish trend. The MACD of 31.22 indicates Positive momentum. The RSI at 69.15 is Neutral, neither overbought nor oversold. The STOCH value of 25.34 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

Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
80
Outperform
£396.00M12.9313.45%2.74%-6.07%41.18%
77
Outperform
£409.98M10.3535.97%1.96%22.39%179.53%
77
Outperform
£645.13M14.2522.62%3.27%3.23%2.00%
GBRST
68
Neutral
£359.43M28.725.32%2.90%-0.65%
58
Neutral
$1.34B4.24-2.93%7.38%3.67%-51.13%
53
Neutral
£265.65M205.36-5.28%0.80%-8.12%-794.85%
GBFIH
52
Neutral
£24.10M-7.06%0.65%-22.37%-192.17%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
GB:RCDO
Ricardo
427.00
-44.76
-9.49%
GB:COST
Costain
1.46
0.58
65.91%
GB:FIH
FIH Group plc
192.50
-51.65
-21.16%
GB:GFRD
Galliford Try
417.00
161.75
63.37%
GB:RNWH
Renew Holdings plc
815.00
-268.71
-24.80%
GB:RST
Restore
262.50
3.83
1.48%

Ricardo Corporate Events

Business Operations and Strategy
Ricardo PLC Experiences Significant Shareholder Change
Neutral
Jun 25, 2025

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.

M&A TransactionsShareholder Meetings
Ricardo PLC Adjourns General Meeting Amid Acquisition Developments
Neutral
Jun 18, 2025

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.

M&A TransactionsShareholder Meetings
Ricardo PLC Proposes Adjournment of General Meeting Amid Acquisition Plans
Neutral
Jun 12, 2025

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.

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.

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.Date of analysis: Jun 12, 2025