Rolls-Royce Holdings (RR) AI Stock Analysis

• Market Cap: $96.52B
• Dividend Yield: 0.93%
• Average Volume (3M): 30.33M
• Price to Earnings (P/E): 16.7
• Beta (1Y): 1.06
• Revenue Growth: 9.62%
• EPS Growth: 146.74%
• Country: UK
• Employees: 42,400
• Sector: Industrials
• Sector Strength: 72
• Industry: Aerospace & Defense
• EPS (TTM): 0.16
• Shares Outstanding: 8,411,715,000
• 10 Day Avg. Volume: 40,848,570
• 30 Day Avg. Volume: 30,333,354
• PEG Ratio: 5.49
• Price to Book (P/B): -52.30
• Price to Sales (P/S): 2.52
• P/FCF Ratio: 16.47
• Enterprise Value/Market Cap: 0.83
• Enterprise Value/Revenue: 4.12
• Enterprise Value/Gross Profit: 16.75
• Enterprise Value/Ebitda: 19.02
• 1Y Price Target: $1,160.94
• Price Target Upside: 2.60% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 9
• EPS Forecast (FY): 28.73
• Revenue Forecast (FY): $1.97T

• Rating: 71 Outperform
• Price Target: 1,239.00p ▲(9.50% Upside)

Rolls-Royce Holdings' overall stock score is driven by strong earnings call performance and fair valuation, despite financial stability concerns due to negative equity. Technical indicators suggest potential short-term weakness, but the company's strategic initiatives and improved margins provide a positive outlook.

Positive Factors

Revenue Growth

The company's robust revenue growth indicates strong demand and effective market positioning, enhancing its competitive edge in the aerospace and defense sectors.

Improved Margins

Improved margins reflect efficient cost management and operational effectiveness, boosting profitability and long-term financial health.

Cash Generation

Strong cash generation enhances financial flexibility, enabling strategic investments and shareholder returns, supporting sustainable growth.

Negative Factors

Negative Equity

Negative equity suggests financial instability, potentially limiting the company's ability to leverage new opportunities or withstand economic downturns.

High Debt Levels

High debt levels can strain cash flow and limit financial flexibility, impacting the company's ability to invest in growth and innovation.

Supply Chain Constraints

Ongoing supply chain issues could hinder production efficiency and cost management, affecting the company's ability to meet demand and maintain margins.

Rolls-Royce Holdings Business Overview & Revenue Model

Company Description

Rolls-Royce Holdings plc operates as an industrial technology company in the United Kingdom and internationally. The company operates in four segments: Civil Aerospace, Power Systems, Defence, and New Markets. The Civil Aerospace segment develops, manufactures, and sells aero engines for large commercial aircraft, regional jet, and business aviation markets, as well as provides aftermarket services. The Power Systems segment engages in the development, manufacture, marketing, and sale of integrated solutions for onsite power and propulsion for the marine, defense, power generation, and industrial markets. The Defence segment offers aero engines for military transport and patrol aircraft applications; and naval engines and submarine nuclear power plants, as well as aftermarket services. The New Markets segment develops, manufactures, and sells small modular reactor and new electrical power solutions. It also provides maintenance, repair, and overhaul services. Rolls-Royce Holdings plc was founded in 1884 and is headquartered in London, the United Kingdom.

How the Company Makes Money

Rolls-Royce generates revenue through several key streams, primarily from the sale of its high-performance aircraft engines, which are utilized in commercial and military aircraft. The company operates a significant aftermarket services business, providing maintenance, repair, and overhaul (MRO) services for its engines, which creates a recurring revenue model as customers pay for ongoing support and service agreements. In addition to aerospace, Rolls-Royce earns income from its power systems division, which delivers solutions for marine and industrial applications, and from its nuclear and renewable energy sectors. The company has established partnerships with various airlines, defense contractors, and government agencies, which further solidify its revenue base. Economic factors, defense spending trends, and advancements in technology also play crucial roles in influencing the company's earnings.

Rolls-Royce Holdings Financial Statement Overview

Summary

Rolls-Royce Holdings shows strong revenue and profit growth with improved cash flow metrics, indicating effective operational performance. However, significant balance sheet challenges with negative equity and high debt levels pose potential financial stability risks.

Income Statement

Rolls-Royce Holdings has demonstrated strong revenue growth with a 14.7% increase in 2024 compared to 2023. The gross profit margin improved to 22.3% in 2024 from 22.0% in 2023, indicating effective cost management. The company's net profit margin also increased to 13.3% in 2024. However, the EBITDA margin slightly decreased from 22.7% in 2023 to 18.4% in 2024, which suggests a need to control operating expenses further.

Balance Sheet

The balance sheet shows a significant challenge with negative stockholders' equity at -$912 million. This indicates that liabilities exceed assets, which could be a concern for financial stability. The debt-to-equity ratio cannot be calculated due to negative equity, but the overall high level of debt relative to assets remains a concern. The equity ratio is also negative, suggesting potential financial instability.

Cash Flow

Rolls-Royce's free cash flow grew by 63.3% in 2024, indicating strong cash generation capabilities. The operating cash flow to net income ratio improved to 1.50, showing efficient conversion of income to cash. However, the high free cash flow to net income ratio suggests reliance on non-operating sources of cash flow, which may not be sustainable long-term.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	19.54B	18.91B	16.49B	13.52B	11.22B	11.49B
Gross Profit	4.80B	4.22B	3.62B	2.69B	2.14B	1.11B
EBITDA	4.23B	3.48B	3.74B	1.25B	996.00M	222.00M
Net Income	5.79B	2.52B	2.41B	-1.27B	120.00M	-3.17B
Balance Sheet
Total Assets	37.94B	35.69B	31.51B	29.45B	28.67B	29.52B
Cash, Cash Equivalents and Short-Term Investments	6.13B	5.36B	3.52B	2.40B	2.55B	3.31B
Total Debt	5.04B	5.13B	5.76B	5.96B	7.78B	7.33B
Total Liabilities	35.51B	36.57B	35.14B	35.47B	33.31B	34.39B
Stockholders Equity	2.41B	-912.00M	-3.68B	-6.05B	-4.66B	-4.90B
Cash Flow
Free Cash Flow	3.18B	2.90B	1.77B	1.25B	-818.00M	-3.96B
Operating Cash Flow	4.13B	3.78B	2.48B	1.85B	-259.00M	-3.01B
Investing Cash Flow	-950.00M	-831.00M	-726.00M	826.00M	-428.00M	-1.01B
Financing Cash Flow	-1.36B	-1.05B	-549.00M	-2.87B	-88.00M	3.02B

Rolls-Royce Holdings Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 1131.50
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:RR, the sentiment is Neutral. The current price of 1131.5 is below the 20-day moving average (MA) of 1135.07, below the 50-day MA of 1133.86, and above the 200-day MA of 905.17, indicating a neutral trend. The MACD of 5.26 indicates Negative momentum. The RSI at 47.64 is Neutral, neither overbought nor oversold. The STOCH value of 54.56 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for GB:RR.

Rolls-Royce Holdings Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CHG	73 Outperform	£1.54B	39.43	―	1.45%	―	―
RR	71 Outperform	$96.52B	16.75	3725.44%	0.93%	9.62%	146.74%
BAB	67 Neutral	£6.06B	24.72	49.75%	0.55%	10.08%	49.21%
BA	66 Neutral	$54.04B	28.12	17.59%	1.88%	11.60%	8.03%
SNR	66 Neutral	£803.60M	23.10	8.19%	1.09%	-13.81%	13.86%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
QQ	56 Neutral	£2.53B	-13.93	-23.92%	1.92%	1.02%	-240.44%

Rolls-Royce Holdings Corporate Events

Rolls-Royce Holdings Reports Strong 2025 Half-Year Results

Rolls-Royce Holdings, a prominent player in the aerospace and defense sectors, is renowned for its advanced engineering capabilities and innovative solutions across civil aerospace, defense, and power systems. The company is also making strides in small modular reactors and sustainable energy solutions, positioning itself as a leader in high-performance technology and engineering.