RM (RM) AI Stock Analysis

• Market Cap: £90.13M
• Dividend Yield: N/A
• Average Volume (3M): 106.44K
• Price to Earnings (P/E): 42.8
• Beta (1Y): -0.33
• Revenue Growth: -14.23%
• EPS Growth: 97.27%
• Country: UK
• Employees: 1,644
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 0.07
• Shares Outstanding: 98,085,540
• 10 Day Avg. Volume: 250,725
• 30 Day Avg. Volume: 106,442
• PEG Ratio: -0.29
• Price to Book (P/B): 3.03
• Price to Sales (P/S): 0.58
• P/FCF Ratio: 85.20
• 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: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): 0.08
• Revenue Forecast (FY): £163.10M

• Rating: 47 Neutral
• Price Target: 96.00 p ▼(-15.79% Downside)
• Action: Reiterated Date: 03/07/26
• Date: Action: Reiterated 03/07/26

The score is held back primarily by weak cash-flow quality despite an earnings rebound, alongside a weak technical trend (below major moving averages with negative MACD). A high P/E with no dividend yield provided further reduces support, while balance-sheet deleveraging is the main offsetting positive.

Positive Factors

Return to Profitability

A clear earnings rebound to positive EBIT and net income in FY2025 demonstrates the business can generate operating profits. Sustained profitability supports reinvestment in product development, reduces reliance on external capital, and improves long-term viability if maintained.

Material Deleveraging

Sharp reduction in debt and a much lower debt-to-equity materially improves financial flexibility. Lower leverage reduces interest burden and refinancing risk, enabling RM to fund growth initiatives, absorb shocks, and prioritize strategic investments over debt service.

Subscription-based EdTech Model

A recurring-revenue model (software subscriptions, digital content, assessment services) and institutional partnerships provide structural demand and customer stickiness. This durable mix supports predictable cash inflows and long-term customer relationships in education markets.

Negative Factors

Weak Cash Generation

Free cash flow collapsed and operating cash flow remains modest, with a mixed history including prior negative cash years. Persistent weak cash conversion limits capacity to fund growth, pay down liabilities, or smooth operations without external financing, raising structural risk.

Thin Profit Margins

Profitability is currently thin and gross margin deterioration suggests cost or pricing pressure. Low margins make earnings vulnerable to small revenue fluctuations or cost inflation, constraining ability to build reserves, scale profitably, or withstand sector competition over time.

Prior Balance-sheet Strain and Volatility

The company is still recovering from earlier losses and reduced equity versus prior years. Historical volatility in revenues and past balance-sheet strain complicate forecasting and may limit strategic options, leaving the business exposed if growth or margin improvements falter.

RM Business Overview & Revenue Model

Company Description

RM plc supplies products, services, and solutions to educational markets in the United Kingdom and internationally. The company operates through three divisions: RM Resources, RM Assessment, and RM Technology. The RM Resources division offers teaching resources and education supplies for schools and nurseries through direct sales force, online, and direct catalogue. The RM Assessment division provides IT software and end-to-end digital assessment services to enable online exam marking, online testing, and the management and analysis of educational data, as well as its software helps its customers accelerate their adoption of digital practices and transform assessment across practice, progress, evidence collection, and exams to unlock teaching and learning benefits. The RM Technology division provides IT services to schools and colleges to deliver a technology environment that improves learning outcomes. This division provides IT outsourcing services; cloud-based products; and digital platforms. RM plc was founded in 1973 and is headquartered in Abingdon, the United Kingdom.

How the Company Makes Money

RM generates revenue through several key streams, including the sale of educational software, digital learning resources, and consultancy services for schools and educational institutions. The company's primary revenue model is based on subscription fees for its software solutions and licenses for its digital content. Additionally, RM earns income from assessment services, including the management of examinations and certifications. Strategic partnerships with educational institutions, government bodies, and other stakeholders in the education sector further bolster its revenue, enabling RM to expand its market reach and enhance its offerings.

RM Financial Statement Overview

Summary

FY2025 shows a return to profitability (positive EBIT and net income) and a much healthier balance sheet with sharply reduced debt and positive equity. However, the recovery is not yet well-established: margins remain thin and cash generation is the weakest area, with free cash flow down sharply year over year and an uneven history of cash conversion.

Income Statement

FY2025 shows a clear earnings rebound versus FY2024, returning to positive EBIT (£9.7m) and net income (£2.2m) after losses in FY2022–FY2024. Revenue growth in FY2025 is strong (+117%), but the path has been volatile, with declines in FY2023–FY2024. Profitability is still thin (FY2025 net margin ~1.4% vs ~4.0% in FY2020), and gross margin has softened versus FY2024, suggesting the turnaround is not yet firmly established.

Balance Sheet

Leverage has improved materially: total debt fell to ~£15.4m in FY2025 from ~£74.8m in FY2024, bringing debt-to-equity down to ~0.50 (from ~4.37). Equity remains positive (~£30.9m), and return on equity is back to positive (~7.1%) after deeply negative levels in prior years. The main weakness is reduced equity versus earlier periods (e.g., FY2021), indicating the business is still recovering from prior losses and balance-sheet strain.

Cash Flow

Cash generation is currently the weakest area. FY2025 operating cash flow is modest (~£2.1m) and well below FY2024 (~£8.4m), while free cash flow fell sharply to ~£1.1m (down ~85% year over year). Free cash flow covers only about half of net income in FY2025, and the company has a mixed history including negative operating and free cash flow in FY2022–FY2023, indicating uneven conversion of profits into cash.

Breakdown	Nov 2025	Nov 2024	Nov 2023	Nov 2022	Nov 2021
Income Statement
Total Revenue	162.07M	166.14M	195.19M	214.17M	206.15M
Gross Profit	61.63M	66.65M	60.19M	61.06M	59.04M
EBITDA	9.72M	-1.32M	26.80M	-10.73M	11.24M
Net Income	2.19M	-4.74M	-29.10M	-14.50M	4.19M
Balance Sheet
Total Assets	145.11M	138.50M	139.76M	202.65M	210.82M
Cash, Cash Equivalents and Short-Term Investments	6.17M	8.20M	8.06M	1.91M	3.56M
Total Debt	72.11M	74.82M	70.14M	67.87M	42.75M
Total Liabilities	114.19M	121.39M	121.94M	142.01M	123.32M
Stockholders Equity	30.93M	17.11M	17.83M	60.64M	86.97M
Cash Flow
Free Cash Flow	1.10M	3.55M	-11.55M	-25.99M	-3.40M
Operating Cash Flow	2.09M	8.37M	-10.46M	-20.79M	4.62M
Investing Cash Flow	-9.74M	-4.72M	20.85M	891.00K	-12.59M
Financing Cash Flow	10.19M	-8.00M	-4.14M	20.29M	6.03M

RM Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 114.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:RM, the sentiment is Negative. The current price of 114 is above the 20-day moving average (MA) of 98.50, above the 50-day MA of 103.35, and above the 200-day MA of 103.49, indicating a bearish trend. The MACD of -2.25 indicates Positive momentum. The RSI at 35.56 is Neutral, neither overbought nor oversold. The STOCH value of 2.34 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GB:RM.

RM Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GBG	70 Outperform	£462.83M	71.10	1.53%	1.73%	-0.18%	11.49%
TRB	70 Outperform	£122.12M	5.94	15.34%	1.71%	3.48%	318.89%
SKL	69 Neutral	£51.97M	18.48	17.89%	0.77%	14.64%	916.67%
NET	68 Neutral	£165.37M	37.63	5.22%	0.80%	22.80%	-32.13%
IDOX	65 Neutral	£322.84M	52.26	7.57%	1.04%	10.93%	12.30%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
RM	47 Neutral	£90.13M	42.76	10.33%	―	-14.23%	97.27%