Renishaw (RSW) AI Stock Analysis

• Market Cap: £1.95B
• Dividend Yield: 2.84%
• Average Volume (3M): 105.78K
• Price to Earnings (P/E): 20.0
• Beta (1Y): 1.14
• Revenue Growth: 4.71%
• EPS Growth: 0.43%
• Country: UK
• Employees: 5,256
• Sector: Technology
• Sector Strength: 76
• Industry: Hardware, Equipment & Parts
• EPS (TTM): 0.72
• Shares Outstanding: 72,788,540
• 10 Day Avg. Volume: 108,059
• 30 Day Avg. Volume: 105,780
• PEG Ratio: -26.95
• Price to Book (P/B): 2.16
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 31.03
• 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: £2,610.00
• Price Target Upside: -2.61% Downside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 3

Renishaw scores well on financial stability and corporate events, with strong revenue growth and strategic moves to enhance profitability. However, the stock faces challenges from weak technical momentum and a moderate valuation. The company is financially robust with potential for future growth but needs to overcome current market pressure.

Positive Factors

Order Intake

There is a more favorable order intake environment expected, driven by semiconductor manufacturing and consumer electronics markets.

Portfolio Management

Encouragement is drawn from signs of value-creating portfolio management.

Trade Deals

There is likely to be a healthy relief rally supported by the growing news of a US/UK trade deal.

Negative Factors

Earnings Risk

Near term though post the 3Q update, there is more limited earnings risk.

Financial Performance

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

Investor Confidence

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

Renishaw Business Overview & Revenue Model

Company Description

Renishaw (RSW) is a leading global engineering and technology company that specializes in precision measurement and healthcare solutions. The company operates across various sectors including industrial automation, healthcare, and additive manufacturing. Renishaw's core products and services include metrology equipment, such as coordinate measuring machines and laser encoders, as well as advanced healthcare technologies like neurological products and dental scanners.

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's financial performance is solid, with stable revenue growth and robust gross profit margins. The balance sheet is strong with minimal leverage and high equity, although profitability on equity could improve. Cash flow performance shows significant improvement, enhancing financial flexibility.

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
Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement		Total Revenue
691.30M	681.67M	673.70M	567.44M	509.48M
	Gross Profit
323.64M	434.00M	438.78M	369.64M	325.16M
	EBIT
108.67M	126.26M	167.92M	117.83M	57.36M
	EBITDA
156.07M	166.39M	174.02M	172.36M	48.37M
	Net Income Common Stockholders
96.89M	116.10M	120.35M	111.46M	288.00K
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
217.84M	206.39M	253.16M	225.59M	130.95M
	Total Assets
1.05B	1.04B	992.77M	856.88M	766.46M
	Total Debt
18.54M	13.33M	16.26M	20.01M	24.71M
	Net Debt
-103.75M	-66.87M	-124.95M	-84.08M	-94.47M
	Total Liabilities
148.56M	146.88M	177.60M	153.55M	219.59M
	Stockholders Equity
903.40M	897.24M	815.75M	703.91M	547.44M
Cash Flow		Free Cash Flow
49.30M	6.27M	82.58M	111.81M	46.06M
	Operating Cash Flow
124.08M	90.87M	122.24M	135.53M	105.46M
	Investing Cash Flow
-31.50M	-76.90M	-28.01M	-134.43M	-12.28M
	Financing Cash Flow
-52.70M	-60.74M	-55.30M	-17.84M	-37.62M

Renishaw Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 2680.00
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:RSW, the sentiment is Neutral. The current price of 2680 is above the 20-day moving average (MA) of 2430.50, above the 50-day MA of 2504.80, and below the 200-day MA of 3105.31, indicating a neutral trend. The MACD of 77.00 indicates Negative momentum. The RSI at 58.77 is Neutral, neither overbought nor oversold. The STOCH value of 82.93 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for GB:RSW.

Renishaw Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SOLI	78 Outperform	£107.66M	20.19	8.61%	1.96%	-11.80%	-32.11%
DSCV	71 Outperform	£612.27M	38.39	5.31%	1.90%	-5.56%	-27.87%
RSW	70 Outperform	£1.95B	19.96	11.07%	2.84%	4.71%	0.43%
JDG	65 Neutral	£555.48M	53.33	12.29%	1.17%	-1.84%	9.56%
SXS	62 Neutral	£2.05B	8.88	17.33%	3.89%	-11.09%	65.87%
Sector *	60 Neutral	$11.59B	10.39	-7.23%	2.94%	7.46%	-10.76%
GHH	58 Neutral	£133.06M	46.53	2.87%	2.56%	-8.41%	-31.29%

Renishaw Corporate Events

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.

Spark’s Take on GB:RSW Stock

According to Spark, TipRanks’ AI Analyst, GB:RSW is a Neutral.

Renishaw demonstrates strong financial stability and operational efficiency, complemented by a reasonable valuation and positive corporate events. However, weak technical momentum tempers the overall score, indicating potential risks in market performance despite the company’s underlying strengths.

To see Spark’s full report on GB:RSW stock, click here.

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.

Spark’s Take on GB:RSW Stock

According to Spark, TipRanks’ AI Analyst, GB:RSW is a Neutral.

Renishaw demonstrates a strong financial position with efficient operations and a robust balance sheet. However, technical analysis indicates weak market momentum, which tempers the overall score. Valuation metrics suggest a fair price, while recent corporate events highlight positive growth prospects, though they do not significantly alter the current technical trends.

To see Spark’s full report on GB:RSW stock, click here.