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Rolls-Royce (RYCEY)
OTHER OTC:RYCEY

Rolls-Royce (RYCEY) AI Stock Analysis

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Rolls-Royce

(OTC:RYCEY)

53Neutral
Rolls-Royce's financial turnaround is evident through improved income and cash flow metrics, although the negative equity on its balance sheet is a considerable risk. Technical indicators suggest the stock has strong momentum but caution is warranted due to potential overvaluation and an overbought status. Overall, the stock scores moderately due to these mixed factors.

Rolls-Royce (RYCEY) vs. S&P 500 (SPY)

Rolls-Royce Business Overview & Revenue Model

Company DescriptionRolls-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 MoneyRolls-Royce generates revenue through the sale and servicing of its power and propulsion systems. The Civil Aerospace segment is a significant contributor, where the company designs, manufactures, and sells aircraft engines for large commercial aircraft, regional jets, and business aviation. This segment also includes aftermarket services, offering maintenance, repair, and overhaul (MRO) services that provide a steady stream of recurring revenue. In the Power Systems sector, Rolls-Royce provides high-speed reciprocating engines and complete power generation systems for a variety of industries, including marine, power generation, and industrial applications. The Defense segment supplies military aero engines and services to over 160 countries, ensuring long-term contracts and partnerships. The company's financial performance is also supported by strategic partnerships and collaborations with key players in the aerospace and defense industries, enhancing its market reach and technological capabilities.

Rolls-Royce Financial Statement Overview

Summary
Overall, Rolls-Royce is demonstrating a financial turnaround with strong income statement recovery and cash flow improvement. However, the balance sheet remains a significant weakness, with negative equity and high liabilities posing potential risks. The company's ability to sustain its revenue growth and further stabilize its financial structure will be crucial for future performance.
Income Statement
75
Positive
Rolls-Royce has shown a strong recovery in its income statement metrics over recent years. The gross profit margin stands at 22.32%, with a notable improvement in net profit margin to 13.34% in the latest year. Revenue growth rate is robust at 14.68%, indicating a positive trajectory. The EBIT margin of 15.37% and EBITDA margin of 18.42% demonstrate improved operational efficiency. However, the company has faced volatility in net income in previous years, which remains a potential risk.
Balance Sheet
40
Negative
The balance sheet of Rolls-Royce reveals significant challenges, with a negative stockholders' equity indicating financial instability. The debt-to-equity ratio is not meaningful due to negative equity, posing a risk of high leverage. Although total assets have increased, the equity ratio is negative, underlining the company’s reliance on liabilities. Despite improvements in liquidity, the balance sheet stability remains a concern.
Cash Flow
65
Positive
Rolls-Royce's cash flow statement shows encouraging trends with a substantial free cash flow growth rate of 63.36%. The operating cash flow to net income ratio is 1.5, indicating strong cash generation relative to earnings. However, the free cash flow to net income ratio of 1.15 suggests a need for careful capital expenditure management. The positive cash flow trajectory is a strength, but historical cash flow volatility poses a risk.
Breakdown
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
22.31B18.91B16.49B13.52B11.22B11.82B
Gross Profit
5.05B4.22B3.62B2.76B2.14B-210.00M
EBIT
3.21B2.91B1.94B339.00M513.00M-2.08B
EBITDA
3.88B3.48B3.74B1.29B996.00M-166.00M
Net Income Common Stockholders
2.92B2.52B2.41B-1.19B120.00M-3.17B
Balance SheetCash, Cash Equivalents and Short-Term Investments
5.00B5.36B3.52B2.40B2.55B3.42B
Total Assets
31.86B35.69B31.51B29.45B28.67B29.52B
Total Debt
4.66B5.13B5.76B5.96B7.78B7.33B
Net Debt
-312.00M-195.00M2.25B3.58B5.24B4.02B
Total Liabilities
32.91B36.57B35.14B35.47B33.31B34.39B
Stockholders Equity
-1.07B-912.00M-3.68B-6.05B-4.66B-4.90B
Cash FlowFree Cash Flow
2.92B2.90B1.77B1.25B-818.00M-3.96B
Operating Cash Flow
3.59B3.78B2.48B1.85B-259.00M-3.01B
Investing Cash Flow
-917.00M-831.00M-726.00M826.00M-428.00M-1.01B
Financing Cash Flow
-734.50M-1.05B-549.00M-2.87B-88.00M3.02B

Rolls-Royce Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price9.82
Price Trends
50DMA
8.90
Positive
100DMA
8.03
Positive
200DMA
7.23
Positive
Market Momentum
MACD
0.35
Positive
RSI
56.59
Neutral
STOCH
18.81
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RYCEY, the sentiment is Neutral. The current price of 9.82 is below the 20-day moving average (MA) of 10.13, above the 50-day MA of 8.90, and above the 200-day MA of 7.23, indicating a neutral trend. The MACD of 0.35 indicates Positive momentum. The RSI at 56.59 is Neutral, neither overbought nor oversold. The STOCH value of 18.81 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for RYCEY.

Rolls-Royce Peers Comparison

Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
NONOC
78
Outperform
$74.27B18.1127.75%1.60%4.44%110.33%
RTRTX
77
Outperform
$177.37B37.397.96%1.93%17.15%58.66%
LMLMT
74
Outperform
$105.60B20.1181.04%2.84%5.14%-19.14%
GEGE
70
Outperform
$218.73B34.1127.62%0.79%-32.60%-28.55%
62
Neutral
$8.08B13.633.82%3.13%3.58%-14.35%
53
Neutral
$86.36B25.68-65.53%17.89%6.77%
BABA
39
Underperform
$126.53B-162.23%-14.49%-399.90%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
RYCEY
Rolls-Royce
9.82
4.51
84.93%
BA
Boeing
150.91
-32.38
-17.67%
GE
GE Aerospace
187.63
41.48
28.38%
LMT
Lockheed Martin
454.78
12.34
2.79%
NOC
Northrop
515.17
63.46
14.05%
RTX
Raytheon Technologies
130.23
33.05
34.01%
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.