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RM plc (GB:RM)
LSE:RM
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RM (RM) AI Stock Analysis

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GB:RM

RM

(LSE:RM)

Rating:55Neutral
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 (RM) vs. iShares MSCI United Kingdom ETF (EWC)

RM Business Overview & Revenue Model

Company DescriptionRM (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 MoneyRM 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
45
Neutral
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
40
Negative
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
55
Neutral
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.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue166.14M195.19M214.17M210.85M189.00M
Gross Profit66.65M60.19M67.29M70.63M73.97M
EBITDA-1.32M-26.81M-10.73M11.24M16.87M
Net Income-4.74M-29.10M-16.09M4.19M7.63M
Balance Sheet
Total Assets138.50M139.76M202.65M210.82M172.37M
Cash, Cash Equivalents and Short-Term Investments8.20M8.06M1.91M3.56M5.94M
Total Debt74.82M70.14M67.87M42.75M29.47M
Total Liabilities121.39M121.94M142.01M123.32M116.99M
Stockholders Equity17.11M17.83M60.64M87.50M55.38M
Cash Flow
Free Cash Flow3.55M-11.55M-25.99M-3.40M12.64M
Operating Cash Flow8.37M-10.46M-20.79M4.62M21.10M
Investing Cash Flow-4.72M20.85M891.00K-12.59M-3.98M
Financing Cash Flow-8.00M-4.14M20.29M6.03M-15.25M

RM Technical Analysis

Technical Analysis Sentiment
Positive
Last Price104.00
Price Trends
50DMA
97.70
Positive
100DMA
99.69
Positive
200DMA
97.51
Positive
Market Momentum
MACD
2.20
Negative
RSI
64.30
Neutral
STOCH
89.74
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

Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
78
Outperform
£96.81M23.4526.84%64.99%270.77%
77
Outperform
£93.76M17.0410.98%258.28%4.97%3.63%
65
Neutral
£66.31M13.1916.09%195.22%26.05%7.09%
64
Neutral
£130.24M117.7411.82%
63
Neutral
£505.30M23.90-8.45%170.40%4.53%-18.72%
59
Neutral
£54.57M99.66-0.90%706.52%-18.13%-151.19%
55
Neutral
£86.01M-3.40%-14.23%97.27%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
GB:RM
RM
104.00
20.25
24.18%
GB:OMG
Oxford Metrics
46.00
-40.97
-47.11%
GB:TRB
Tribal Group plc
43.80
-15.45
-26.08%
GB:CLBS
Celebrus Technologies
167.50
-83.36
-33.23%
GB:IGP
Intercede
162.50
14.50
9.80%
GB:AOM
ActiveOps plc
182.50
59.50
48.37%
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: Jul 28, 2025