Renishaw (RSW) AI Stock Analysis

• Market Cap: £2.05B
• Dividend Yield: 0.88%
• Average Volume (3M): 98.79K
• Price to Earnings (P/E): 21.4
• Beta (1Y): 1.11
• Revenue Growth: 4.71%
• EPS Growth: 0.43%
• Country: UK
• Employees: 5,256
• Sector: Technology
• Sector Strength: 91
• Industry: Hardware, Equipment & Parts
• EPS (TTM): 0.72
• Shares Outstanding: 72,788,540
• 10 Day Avg. Volume: 166,907
• 30 Day Avg. Volume: 98,789
• PEG Ratio: -8.07
• Price to Book (P/B): 3.16
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 452.70
• 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: £2,625.67
• Price Target Upside: -8.51% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 3

• Rating: 74 Outperform
• Price Target: 3,207.00p ▲(11.74%Upside)

Renishaw's strong financial position and strategic initiatives are major strengths, supporting a solid stock performance. However, decreased net profit margins and limited dividend yield slightly offset these positives.

Positive Factors

Operational Efficiency

Renishaw has made significant investments to reduce the labor intensity of its production, which helps deliver a gross margin uplift.

Production Capacity

The expansion of the Miskin site has doubled its capacity, indicating a commitment to growth and increased production capabilities.

Negative Factors

Financial Outlook

Guidance suggests significant downgrades to consensus estimates, which could affect investor confidence.

Revenue and Profit Challenges

The 2Q slowdown for Renishaw has resulted in a decline in revenue and adjusted profit before tax, indicating financial challenges.

Renishaw Business Overview & Revenue Model

Company Description

Renishaw plc, an engineering and scientific technology company, designs, manufactures, distributes, sells, and services metrology and healthcare products worldwide. The company offers co-ordinate measuring machine (CMM) products, machine tool probe and software, performance measurement systems, gauging systems, fixtures, and styli for touch probe systems; interferometric laser, magnetic, and optical encoders; additive manufacturing systems; plastics and metal vacuum casting machines; and mapping sensors. It also provides healthcare products, such as dental scanners, neurosurgical robots and accessories, neurosurgical planning software, drug delivery systems, Raman microscopes, craniomaxillofacial customized implants, analysers, and hybrid Raman systems. In addition, the company offers asset financing and travel agency services. It serves the aerospace, agriculture, automotive, construction, consumer electronics, healthcare, power generation, resource exploration, energy, heavy, medical, and precision manufacturing industries, as well as scientific, research, and analysis industries. The company was incorporated in 1973 and is headquartered in Wotton-under-Edge, the United Kingdom.

How the Company Makes Money

Renishaw makes money through the sale of its precision measurement equipment and healthcare products. Its primary revenue streams include the metrology and healthcare sectors, where it provides advanced technology solutions to a wide range of industries, including aerospace, automotive, and healthcare. The company also generates income through service and maintenance contracts for its equipment, as well as from its research and development activities, which lead to innovative product offerings. Strategic partnerships and collaborations with industry leaders further contribute to Renishaw's earnings by expanding its market reach and enhancing its product portfolio.

Renishaw Financial Statement Overview

Summary

Renishaw demonstrates stable revenue growth and robust operational efficiency with a strong balance sheet characterized by minimal leverage. However, slight pressure on profitability is evident from decreased net profit margins.

Income Statement

Renishaw's income statement shows stable revenue growth with a 1.41% increase in the latest year. Gross profit margin remains robust at 46.8%, although it has slightly decreased from previous years. The net profit margin has also decreased to 14.0%, indicating some pressure on profitability. However, the company maintains a solid EBIT margin of 15.7% and an EBITDA margin of 22.6%, demonstrating operational efficiency.

Balance Sheet

The balance sheet is strong with a very low debt-to-equity ratio of 0.02, indicating minimal leverage and financial risk. The equity ratio is high at 85.9%, reflecting a strong equity base. Return on equity stands at 10.7%, which is decent, though it has declined from previous levels, suggesting reduced profitability on equity.

Cash Flow

Renishaw exhibits a positive free cash flow growth of 686.9% year-over-year, signaling significant improvement in cash generation. The operating cash flow to net income ratio is 1.28, which shows strong cash flow relative to net income. The free cash flow to net income ratio is 0.51, indicating moderate free cash flow relative to net earnings.

Breakdown	TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement
Total Revenue	702.21M	691.30M	681.67M	673.70M	567.44M	509.48M
Gross Profit	381.06M	326.94M	434.00M	438.78M	369.64M	325.16M
EBITDA	140.56M	156.07M	166.39M	174.02M	172.36M	48.37M
Net Income	97.64M	96.89M	116.10M	120.35M	111.46M	288.00K
Balance Sheet
Total Assets	1.04B	1.05B	1.04B	992.77M	856.88M	766.46M
Cash, Cash Equivalents and Short-Term Investments	233.16M	217.84M	206.39M	253.16M	225.59M	130.95M
Total Debt	17.49M	18.54M	13.33M	16.26M	20.01M	24.71M
Total Liabilities	148.11M	148.56M	146.88M	177.60M	153.55M	219.59M
Stockholders Equity	896.29M	903.40M	897.24M	815.75M	703.91M	547.44M
Cash Flow
Free Cash Flow	100.63M	49.30M	6.27M	82.58M	111.81M	46.06M
Operating Cash Flow	148.78M	124.08M	90.87M	122.24M	135.53M	105.46M
Investing Cash Flow	-91.29M	-31.50M	-76.90M	-28.01M	-134.43M	-12.28M
Financing Cash Flow	-48.85M	-52.70M	-60.74M	-55.30M	-17.84M	-37.62M

Renishaw Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2870.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:RSW, the sentiment is Positive. The current price of 2870 is above the 20-day moving average (MA) of 2829.25, above the 50-day MA of 2697.20, and below the 200-day MA of 2982.64, indicating a neutral trend. The MACD of 44.99 indicates Positive momentum. The RSI at 54.16 is Neutral, neither overbought nor oversold. The STOCH value of 50.72 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GB:RSW.

Renishaw Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DSCV	78 Outperform	£662.97M	27.79	8.07%	2.48%	-3.23%	58.34%
SOLI	78 Outperform	£104.26M	204.44	0.81%	0.90%	-11.80%	-32.11%
RSW	74 Outperform	£2.05B	21.38	11.07%	0.88%	4.71%	0.43%
JDG	72 Outperform	£554.44M	52.95	12.29%	1.79%	-1.84%	9.56%
SXS	69 Neutral	£3.95B	17.10	17.33%	2.09%	-11.09%	65.87%
GHH	65 Neutral	£168.11M	29.98	4.79%	1.58%	1.74%	359.50%
Sector *	63 Neutral	$34.16B	5.78	-11.85%	1.82%	5.31%	-18.32%

Renishaw Corporate Events

Renishaw Unveils Strategic Plans at Capital Markets Day

Renishaw hosted a Capital Markets Day to outline strategic progress and financial goals, including new product releases and changes to segmental reporting. The company aims to drive revenue growth through innovation, improve margins, and enhance shareholder returns with a new cost reduction program targeting £20 million in savings. The event highlighted significant investments in manufacturing capacity and introduced new business segments to better align with market demands.

The most recent analyst rating on (GB:RSW) stock is a Buy with a £4180.00 price target. To see the full list of analyst forecasts on Renishaw stock, see the GB:RSW Stock Forecast page.

Renishaw Reports Steady Q3 Growth Amid Strategic Restructuring

Renishaw plc reported steady progress in its third quarter, with revenue reaching £180.7 million, marking a 5% increase year-on-year. The company experienced growth in machine tool probes and position encoders, while also announcing the closure of its loss-making drug delivery segment in the Neurological business to enhance profitability. Despite challenges such as tariffs and increased labor costs, Renishaw maintains a strong balance sheet and continues to focus on productivity and strategic investments to support future growth.

Renishaw CEO Acquires Shares, Signaling Confidence in Company

Renishaw plc announced a transaction involving its Chief Executive, William Ernest Lee, who acquired 1,788 ordinary shares at a price of £22.37 each on the London Stock Exchange. This acquisition reflects a significant investment by the company’s leadership, potentially indicating confidence in Renishaw’s future performance and market position.