RM (RM) AI Stock Analysis

• Market Cap: £86.01M
• Dividend Yield: N/A
• Average Volume (3M): 1.00M
• Price to Earnings (P/E): ―
• Beta (1Y): -0.09
• Revenue Growth: -14.23%
• EPS Growth: 97.27%
• Country: UK
• Employees: 1,644
• Sector: Technology
• Sector Strength: 91
• Industry: Software - Application
• EPS (TTM): -0.02
• Shares Outstanding: 83,875,015
• 10 Day Avg. Volume: 103,505
• 30 Day Avg. Volume: 1,004,462
• PEG Ratio: -0.19
• Price to Book (P/B): 4.74
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 13.40
• 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: £97.00
• Price Target Upside: -6.73% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 0

• Rating: 55 Neutral
• Price Target: 107.00p ▲(2.88%Upside)

The overall stock score of 55 reflects significant financial challenges, including declining revenues and negative profitability, which are the most impactful factors. Technical analysis shows positive momentum, but the stock's valuation is unattractive due to a negative P/E ratio and lack of dividend yield.

RM Business Overview & Revenue Model

Company Description

RM (RM) is a leading educational resources and technology company based in the UK, primarily focused on providing innovative solutions to enhance learning and teaching experiences. The company operates in the education sector, offering a range of products and services including software solutions, educational assessments, and learning resources tailored for schools, universities, and educational institutions. RM is committed to improving educational outcomes through technology and has developed a strong reputation for its high-quality digital learning platforms and data management solutions.

How the Company Makes Money

RM generates revenue through multiple key streams, primarily through the sale of its educational software and digital learning platforms to schools and institutions. Additionally, the company earns money by providing assessment services and selling educational resources, including textbooks and learning materials. Significant partnerships with educational institutions and government bodies enhance its revenue potential, as RM often engages in contracts for large-scale projects and service agreements. The company also benefits from ongoing support and maintenance contracts for its software, which provide a stable income source. Furthermore, RM's focus on innovation and adapting to new educational trends enables it to capitalize on emerging markets, contributing to its overall earnings.

RM Financial Statement Overview

Summary

RM is facing significant financial challenges with declining revenues and profitability, high leverage, and fluctuating cash flows. The company must focus on improving operational efficiency and reducing debt to stabilize its financial position. While there are signs of improvement in cash flow, overall financial health remains a concern.

Income Statement

RM has experienced declining revenue and profitability over recent periods. The gross profit margin has decreased from 41.0% in 2019 to 40.1% in 2024. Additionally, the company reported negative EBIT and EBITDA margins in 2024, indicating operational inefficiencies. Revenue growth has been negative, falling from 2023 to 2024 by 14.9%. Despite these challenges, there was a slight improvement in gross profit margin from 2023 to 2024, suggesting some cost management efforts.

Balance Sheet

The balance sheet reveals a concerning financial structure with high leverage. The debt-to-equity ratio increased significantly from 0.34 in 2020 to 4.37 in 2024, indicating high reliance on debt financing. Stockholders' equity has declined, reducing the equity ratio from 31.7% in 2020 to 12.3% in 2024. The negative return on equity in 2024 further highlights profitability challenges. These factors present a risk of financial instability.

Cash Flow

Cash flow performance shows some positive aspects, such as the return to positive operating cash flow in 2024. The free cash flow also turned positive in 2024, driven by reduced capital expenditures and improved cash management. However, the free cash flow growth rate over recent years has been volatile, and 2023 saw a negative free cash flow, indicating past cash management issues.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	166.14M	195.19M	214.17M	210.85M	189.00M
Gross Profit	66.65M	60.19M	67.29M	70.63M	73.97M
EBITDA	-1.32M	-26.81M	-10.73M	11.24M	16.87M
Net Income	-4.74M	-29.10M	-16.09M	4.19M	7.63M
Balance Sheet
Total Assets	138.50M	139.76M	202.65M	210.82M	172.37M
Cash, Cash Equivalents and Short-Term Investments	8.20M	8.06M	1.91M	3.56M	5.94M
Total Debt	74.82M	70.14M	67.87M	42.75M	29.47M
Total Liabilities	121.39M	121.94M	142.01M	123.32M	116.99M
Stockholders Equity	17.11M	17.83M	60.64M	87.50M	55.38M
Cash Flow
Free Cash Flow	3.55M	-11.55M	-25.99M	-3.40M	12.64M
Operating Cash Flow	8.37M	-10.46M	-20.79M	4.62M	21.10M
Investing Cash Flow	-4.72M	20.85M	891.00K	-12.59M	-3.98M
Financing Cash Flow	-8.00M	-4.14M	20.29M	6.03M	-15.25M

RM Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 104.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:RM, the sentiment is Positive. The current price of 104 is above the 20-day moving average (MA) of 95.58, above the 50-day MA of 97.70, and above the 200-day MA of 97.51, indicating a bullish trend. The MACD of 2.20 indicates Negative momentum. The RSI at 64.30 is Neutral, neither overbought nor oversold. The STOCH value of 89.74 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GB:RM.

RM Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
IGP	78 Outperform	£96.81M	23.45	26.84%	―	64.99%	270.77%
TRB	77 Outperform	£93.76M	17.04	10.98%	258.28%	4.97%	3.63%
CLBS	65 Neutral	£66.31M	13.19	16.09%	195.22%	26.05%	7.09%
AOM	64 Neutral	£130.24M	117.74	11.82%	―	―	―
Sector *	63 Neutral	£505.30M	23.90	-8.45%	170.40%	4.53%	-18.72%
OMG	59 Neutral	£54.57M	99.66	-0.90%	706.52%	-18.13%	-151.19%
RM	55 Neutral	£86.01M	―	-3.40%	―	-14.23%	97.27%