RS Group PLC (RS1) AI Stock Analysis

• Market Cap: £2.67B
• Dividend Yield: 3.9%
• Average Volume (3M): 997.46K
• Price to Earnings (P/E): 17.4
• Beta (1Y): 1.39
• Revenue Growth: -1.32%
• EPS Growth: -16.36%
• Country: UK
• Employees: 9,000
• Sector: Industrials
• Sector Strength: 72
• Industry: Industrial - Distribution
• EPS (TTM): 0.16
• Shares Outstanding: 474,049,470
• 10 Day Avg. Volume: 861,254
• 30 Day Avg. Volume: 997,455
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• 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: £685.00
• Price Target Upside: 19.13% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 5

• Rating: 66 Neutral
• Price Target: 614.00p ▲(6.78% Upside)

The overall stock score of 66 reflects RS Group PLC's stable financial position and attractive dividend yield. However, challenges in revenue growth and rising leverage levels are concerns. Technical indicators suggest a neutral to slightly bearish trend, impacting the overall score.

Positive Factors

Business Model Strength

The B2B model provides stable revenue streams through direct sales and subscriptions, enhancing customer loyalty and recurring income.

Operational Efficiency

Stable EBIT and EBITDA margins indicate effective cost management and operational efficiency, supporting long-term profitability.

Comprehensive Product Portfolio

A wide product range allows RS Group to cater to diverse customer needs, enhancing market position and competitive advantage.

Negative Factors

Revenue Growth Challenges

Inconsistent revenue growth can hinder long-term financial performance and necessitates strategic initiatives to drive sales.

Rising Leverage Levels

Increased leverage may strain financial flexibility and elevate risk if revenue growth does not improve, impacting stability.

Declining Net Profit Margins

Decreasing net profit margins suggest difficulty in cost control or pricing power, which could affect long-term earnings potential.

RS Group PLC Business Overview & Revenue Model

Company Description

RS Group PLC (RS1) is a leading global distributor of industrial and electronic products, serving a diverse range of sectors including automation, electrical, and maintenance sectors. The company offers a comprehensive portfolio of over 500,000 products, including electronic components, tools, and industrial supplies, catering to engineers and procurement professionals. RS Group operates across multiple geographies, providing customers with innovative solutions and exceptional service through both online and offline channels.

How the Company Makes Money

RS Group PLC generates revenue primarily through the sale of its extensive range of industrial and electronic products. The company operates on a business-to-business (B2B) model, where it sells directly to engineers, manufacturers, and businesses in need of components and supplies. Key revenue streams include direct product sales, which are facilitated through their e-commerce platform and physical distribution centers. Additionally, RS Group benefits from a subscription-based model for value-added services and product support, which further enhances customer loyalty and recurring revenue. Strategic partnerships with leading manufacturers and suppliers also contribute to the company's earnings, allowing RS Group to offer competitive pricing and exclusive products, thereby driving sales growth.

RS Group PLC Financial Statement Overview

Summary

RS Group PLC shows operational efficiencies with stable EBIT and EBITDA margins. However, challenges in revenue growth and declining net profit margins highlight the need for strategic initiatives. The balance sheet is strong with a solid equity base, but rising debt levels could pose risks. Cash flow generation is satisfactory, though more consistency is needed.

Income Statement

The income statement reflects a mixed performance. Gross profit margins have been relatively stable, with a slight decline in recent years. Net profit margins have also decreased, indicating some challenges in maintaining profitability. Revenue growth has been inconsistent, with a recent period of decline, impacting overall income stability. The EBIT and EBITDA margins show a positive trend, suggesting operational efficiencies. However, the overall trajectory suggests the need for better revenue growth strategies.

Balance Sheet

The balance sheet demonstrates moderate financial health. The debt-to-equity ratio has been increasing, indicating rising leverage, which could pose a risk if revenue growth does not improve. Return on equity has been declining, reflecting challenges in generating returns from shareholder investments. The equity ratio remains solid, indicating a strong asset base relative to liabilities. Overall, the company maintains a stable balance sheet but should monitor leverage levels closely.

Cash Flow

Cash flow analysis shows a healthy operating cash flow relative to net income, indicating efficient cash generation from operations. However, free cash flow growth has been volatile, reflecting challenges in maintaining consistent cash flow. The free cash flow to net income ratio is positive, but the company must focus on improving cash flow stability to support long-term growth and reduce reliance on external financing.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.90B	2.90B	2.94B	2.98B	2.55B	2.00B
Gross Profit	1.24B	1.24B	1.26B	1.32B	1.10B	832.00M
EBITDA	301.00M	320.20M	367.30M	462.90M	379.80M	240.30M
Net Income	152.60M	152.60M	183.70M	284.80M	230.00M	125.50M
Balance Sheet
Total Assets	2.62B	2.62B	2.90B	2.54B	2.10B	1.85B
Cash, Cash Equivalents and Short-Term Investments	147.70M	147.70M	258.70M	260.30M	257.90M	197.90M
Total Debt	511.90M	511.90M	676.90M	373.30M	299.90M	321.00M
Total Liabilities	1.27B	1.27B	1.47B	1.20B	990.20M	943.80M
Stockholders Equity	1.35B	1.35B	1.43B	1.34B	1.11B	899.40M
Cash Flow
Free Cash Flow	242.90M	209.80M	145.00M	260.40M	160.50M	132.90M
Operating Cash Flow	259.10M	259.10M	196.60M	306.50M	203.00M	187.60M
Investing Cash Flow	-57.70M	-57.70M	-355.70M	-270.50M	-40.30M	-190.20M
Financing Cash Flow	-185.40M	-185.40M	138.90M	-79.60M	-94.60M	66.00M

RS Group PLC Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 575.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:RS1, the sentiment is Positive. The current price of 575 is above the 20-day moving average (MA) of 560.00, above the 50-day MA of 564.93, and above the 200-day MA of 572.28, indicating a bullish trend. The MACD of -0.50 indicates Negative momentum. The RSI at 60.64 is Neutral, neither overbought nor oversold. The STOCH value of 89.90 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GB:RS1.

RS Group PLC Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GFTU	79 Outperform	£1.83B	14.47	8.33%	2.70%	5.75%	5.86%
RS1	66 Neutral	£2.67B	17.42	10.95%	3.90%	-1.32%	-16.36%
LTHP	64 Neutral	£188.96M	―	―	6.53%	―	―
BRCK	64 Neutral	£173.96M	26.47	3.43%	6.11%	7.23%	-59.68%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
LORD	57 Neutral	£55.68M	―	-5.01%	2.67%	0.10%	-32.11%
SHI	43 Neutral	£101.50M	-1.51	-37.89%	―	-2.08%	-9.83%