RLX Technology (RLX) AI Stock Analysis

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RLX Technology

(NYSE:RLX)

63Neutral

RLX Technology's overall stock score reflects a balance between its strong financial stability and challenges in income volatility and valuation concerns. The earnings call provided positive guidance with strong revenue growth and improved margins, offset by technical analysis indicating bearish momentum and a high P/E ratio. Strategic focus on international expansion and operational efficiency could mitigate some risks, but near-term caution is advised.

RLX Technology (RLX) vs. S&P 500 (SPY)

Market Cap

$2.16B

Dividend Yield0.47%

Average Volume (3M)7.61M

Price to Earnings (P/E)27.3

Beta (1Y)0.63

Revenue Growth106.83%

EPS Growth10.27%

CountryUS

Employees397

SectorTechnology

Sector Strength51

IndustryTobacco

Share Statistics

EPS (TTM)0.06

Shares Outstanding962,886,800

10 Day Avg. Volume7,840,813

30 Day Avg. Volume7,607,018

Financial Highlights & Ratios

PEG Ratio2.66

Price to Book (P/B)N/A

Price to Sales (P/S)14.77

Price to Cash Flow (P/CF)N/A

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$2.50

Price Target Upside47.06% Upside

Rating ConsensusHold

Number of Analyst Covering1

RLX Technology Business Overview & Revenue Model

Company DescriptionRLX Technology Inc. is a leading Chinese e-vapor company that operates primarily in the development, manufacturing, and distribution of e-vapor products. The company is dedicated to offering adult smokers high-quality alternatives to traditional cigarettes. Through its research and development capabilities, RLX aims to provide innovative and safe products that cater to the evolving preferences of adult smokers.

How the Company Makes MoneyRLX Technology generates revenue primarily through the sale of e-vapor products, which include a range of devices, cartridges, and accessories. The company sells its products through a robust distribution network that includes both direct sales to retailers and partnerships with distributors. RLX leverages its strong brand presence and extensive retail network to reach consumers across various regions. Key revenue streams include the sale of consumable products such as e-liquid pods and devices. Additionally, the company invests in research and development to innovate and expand its product line, thus driving future sales growth. Partnerships with key retailers and adherence to regulatory standards also play a significant role in sustaining and enhancing its revenue streams.

RLX Technology Financial Statement Overview

Summary

RLX Technology shows a mixed financial performance. The balance sheet is strong with low debt, but income stability and cash flow consistency need attention. Recent improvements in net income and cash flow suggest a recovery, yet volatility in revenue and operational margins highlight operational inefficiencies.

Income Statement

Neutral

RLX Technology shows a volatile income statement with significant fluctuations in revenue and profit margins. The Gross Profit Margin has been relatively stable, but a negative EBIT Margin in recent years indicates operational inefficiencies. Revenue growth showed a positive trend from 2023 to 2024, but the significant drop from 2022 to 2023 suggests instability. Positive Net Profit Margin in the latest year reflects improved net income, but overall profitability remains inconsistent.

Balance Sheet

Positive

The balance sheet of RLX Technology is strong, with a healthy Equity Ratio indicating financial stability and low leverage. The Debt-to-Equity Ratio is low, reflecting minimal reliance on debt financing. However, the Return on Equity has been fluctuating, suggesting potential issues with generating returns on equity capital. Overall, the balance sheet indicates a solid financial position with adequate equity to cover liabilities.

Cash Flow

Positive

RLX Technology's cash flow statement shows a mixed performance. Free Cash Flow remains positive, indicating the company can fund its operations and investments without external financing. However, the Free Cash Flow Growth Rate has been inconsistent, reflecting potential volatility in cash-generating ability. The Operating Cash Flow to Net Income Ratio is robust, suggesting strong cash conversion, but fluctuations in free cash flow growth pose some concerns.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
2.44B	1.24B	5.33B	8.52B	3.82B
	Gross Profit
726.52M	387.71M	2.31B	3.67B	1.53B
	EBIT
-107.14M	-496.71M	1.06B	2.30B	13.15M
	EBITDA
-60.63M	-400.11M	1.06B	2.30B	13.15M
	Net Income Common Stockholders
551.84M	534.33M	1.44B	2.02B	-128.10M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
8.49B	8.11B	10.79B	12.85B	3.08B
	Total Assets
16.87B	16.32B	16.38B	16.37B	4.06B
	Total Debt
58.50M	53.85M	85.92M	184.81M	94.52M
	Net Debt
-5.53B	-2.34B	-1.18B	-5.02B	-1.02B
	Total Liabilities
881.10M	716.68M	838.45M	2.85B	2.55B
	Stockholders Equity
15.99B	15.61B	15.57B	13.51B	1.51B
Cash Flow		Free Cash Flow
854.35M	166.29M	448.19M	1.66B	2.57B
	Operating Cash Flow
854.35M	198.70M	486.83M	1.80B	2.59B
	Investing Cash Flow
3.02B	2.09B	-4.13B	-7.87B	-1.81B
	Financing Cash Flow
-678.03M	-1.19B	-477.27M	9.90B	174.88M

RLX Technology Technical Analysis

Technical Analysis Sentiment

Negative

Last Price1.70

Price Trends

50DMA

2.15

Negative

100DMA

2.09

Negative

200DMA

1.89

Negative

Market Momentum

MACD

-0.10

Positive

RSI

36.30

Neutral

STOCH

11.21

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RLX, the sentiment is Negative. The current price of 1.7 is below the 20-day moving average (MA) of 1.90, below the 50-day MA of 2.15, and below the 200-day MA of 1.89, indicating a bearish trend. The MACD of -0.10 indicates Positive momentum. The RSI at 36.30 is Neutral, neither overbought nor oversold. The STOCH value of 11.21 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for RLX.

RLX Technology Risk Analysis

RLX Technology disclosed 91 risk factors in its most recent earnings report. RLX Technology reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

RLX Technology Peers Comparison

Overall Rating

UnderperformOutperform

Sector (57)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MO	72 Outperform	$95.53B	8.66	-503.31%	7.13%	-0.28%	43.51%
PM	67 Neutral	$239.53B	34.04	-37142.11%	3.48%	7.75%	-9.85%
RLX	63 Neutral	$2.16B	27.33	3.49%	0.47%	106.83%	10.27%
UVV	62 Neutral	$1.30B	10.59	8.32%	6.13%	12.88%	-6.33%
BTI	61 Neutral	$90.57B	23.80	5.87%	7.08%	-2.51%	―
Sector *	57 Neutral	$19.95B	9.66	-12.05%	2.76%	5.40%	-24.89%
TPB	57 Neutral	$992.47M	26.13	27.80%	0.51%	-0.13%	2.92%

* Technology Sector Average

Performance Comparison

RLX

RLX Technology

1.70

-0.07

-3.95%

Altria Group

56.65

18.78

49.59%

BTI

British American Tobacco

41.57

15.29

58.18%

Philip Morris

153.89

69.10

81.50%

UVV

Universal

52.73

5.66

12.02%

TPB

Turning Point Brands

55.88

29.36

110.71%

RLX Technology Earnings Call Summary

Earnings Call Date: Mar 14, 2025 | % Change Since: -27.66% | Next Earnings Date: May 16, 2025

Earnings Call Sentiment Positive

The earnings call highlighted strong revenue growth and improved profit margins due to international expansion and efficient operations. Despite operating losses and regulatory challenges, the company's strategic foresight and resilience in navigating these uncertainties were emphasized. Overall, the positive aspects, such as revenue and cash flow improvements, outweigh the negatives.

Highlights

Strong Revenue Growth

Full-year revenues reached RMB 2.7 billion, demonstrating a 73.3% year-over-year growth, driven by international expansion. Fourth quarter revenues were RMB 813.5 million, a 56.3% increase year-over-year.

Improved Profit Margins

The full-year gross profit margin improved to 26.4%, a two percentage point increase. In the fourth quarter, gross profit margin increased by 3.3 percentage points year-over-year to 27.2%.

Positive Non-GAAP Operating Income

Non-GAAP operating income for the full year was RMB 262.5 million, with a fourth-quarter non-GAAP operating profit of RMB 112.6 million, marking a sequential rise for the fifth consecutive quarter.

Strong Cash Position

Operating cash inflow of RMB 497 million in the fourth quarter, and total financial assets as of December 31, 2024, were RMB 15.9 billion.

Recognition for ESG Efforts

Received a double A rating from MSCI, the highest ESG rating in the global tobacco industry.

Lowlights

Operating Loss

Recorded an operating loss of RMB 107 million for the full year.

Regulatory Challenges

Encountered regulatory shifts across multiple markets, which presented challenges and delays in approval processes.

Company Guidance

During the RLX Technology Inc. fourth-quarter and full-year 2024 earnings call, the company reported a robust financial performance, with annual revenues reaching RMB 2.7 billion, marking a remarkable 73.3% year-over-year growth due to their international expansion efforts. The fourth quarter alone saw revenues of RMB 813.5 million, a 56.3% increase compared to the previous year. Their gross profit margin for the year improved to 26.4%, with the fourth quarter seeing a rise to 27.2%, driven by favorable revenue mix changes and cost optimization. Despite recording an operating loss of RMB 107 million, their non-GAAP operating income was RMB 262.5 million for the year, with a non-GAAP operating profit of RMB 112.6 million in the fourth quarter. The company achieved an operating cash inflow of RMB 497 million in the fourth quarter, up from RMB 305 million a year earlier, and maintained a solid financial position with total financial assets of RMB 15.9 billion as of December 31, 2024. RLX Technology Inc. returned approximately $122.9 million to shareholders through share repurchases and dividends in 2024 and plans to continue these shareholder return strategies in 2025. The company also received a double A ESG rating from MSCI, the highest in the global tobacco industry, underscoring its commitment to social responsibility.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.