Ricardo plc

LSE:RCDO Stock Report

Market Cap: UK£256.9m

Ricardo Valuation

Is RCDO undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

  • Below Fair Value

  • Significantly Below Fair Value

  • Price-To-Sales vs Peers

  • Price-To-Sales vs Industry

  • Price-To-Sales vs Fair Ratio

  • Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of RCDO when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: RCDO (£4.3) is trading below our estimate of fair value (£13.4)

Significantly Below Fair Value: RCDO is trading below fair value by more than 20%.

Key Valuation Metric

Which metric is best to use when looking at relative valuation for RCDO?

Key metric: As RCDO is barely profitable we use its Price-To-Sales Ratio for relative valuation analysis.

The above table shows the Price to Sales ratio for RCDO. This is calculated by dividing RCDO's market cap by their current revenue.
What is RCDO's PS Ratio?
PS Ratio0.6x
SalesUK£474.70m
Market CapUK£256.94m

Price to Sales Ratio vs Peers

How does RCDO's PS Ratio compare to its peers?

The above table shows the PS ratio for RCDO vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PSEstimated GrowthMarket Cap
Peer Average1.1x
MRL Marlowe
0.7x-3.8%UK£272.2m
SAG Science Group
1.9x1.6%UK£207.9m
DWF DWF Group
0.7x2.6%UK£316.4m
GTLY Gateley (Holdings)
1.1x5.5%UK£187.0m
RCDO Ricardo
0.6x4.1%UK£261.6m

Price-To-Sales vs Peers: RCDO is good value based on its Price-To-Sales Ratio (0.6x) compared to the peer average (1.2x).

Price to Sales Ratio vs Industry

How does RCDO's PS Ratio compare vs other companies in the GB Professional Services Industry?

12 CompaniesPrice / SalesEstimated GrowthMarket Cap
HAS Hays
0.2x0.4%US$1.57b
IPEL Impellam Group
0.2xn/aUS$489.91m
STEM SThree
0.2x-3.6%US$443.91m
CPI Capita
0.1x-0.2%US$314.20m
RCDO 0.6xIndustry Avg. 0.8xNo. of Companies12PS012345+
12 CompaniesEstimated GrowthMarket Cap
No more companies

Price-To-Sales vs Industry: RCDO is good value based on its Price-To-Sales Ratio (0.6x) compared to the UK Professional Services industry average (0.8x).

Price to Sales Ratio vs Fair Ratio

What is RCDO's PS Ratio compared to its Fair PS Ratio? This is the expected PS Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

RCDO PS Ratio vs Fair Ratio.
Fair Ratio
Current PS Ratio0.6x
Fair PS Ratio0.6x

Price-To-Sales vs Fair Ratio: RCDO is good value based on its Price-To-Sales Ratio (0.6x) compared to the estimated Fair Price-To-Sales Ratio (0.6x).

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

The above table shows the analyst RCDO forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
CurrentUK£4.30
UK£6.44
+49.7%
16.5%UK£7.75UK£3.90n/a9
Dec ’25UK£4.02
UK£6.50
+61.8%
16.1%UK£7.75UK£3.90n/a9
Nov ’25UK£4.32
UK£6.50
+50.6%
16.1%UK£7.75UK£3.90n/a9
Oct ’25UK£4.43
UK£6.50
+46.8%
16.1%UK£7.75UK£3.90n/a9
Sep ’25UK£4.95
UK£6.54
+32.1%
13.3%UK£7.75UK£4.60n/a9
Aug ’25UK£5.20
UK£6.52
+25.3%
14.1%UK£7.75UK£4.60n/a8
Jul ’25UK£4.86
UK£6.52
+34.2%
15.1%UK£7.75UK£4.60n/a7
Jun ’25UK£4.88
UK£6.05
+23.9%
20.7%UK£7.75UK£4.00n/a7
May ’25UK£4.55
UK£6.05
+32.9%
20.7%UK£7.75UK£4.00n/a7
Apr ’25UK£4.57
UK£6.08
+33.0%
19.3%UK£7.75UK£4.00n/a8
Mar ’25UK£4.22
UK£6.03
+42.8%
19.8%UK£7.75UK£4.00n/a7
Feb ’25UK£4.32
UK£6.13
+41.8%
18.0%UK£7.75UK£4.00n/a7
Jan ’25UK£4.90
UK£6.13
+25.0%
18.0%UK£7.75UK£4.00n/a7
Dec ’24UK£4.71
UK£6.13
+30.1%
18.0%UK£7.75UK£4.00UK£4.027
Nov ’24UK£4.42
UK£6.13
+38.6%
18.0%UK£7.75UK£4.00UK£4.327
Oct ’24UK£4.99
UK£6.18
+23.8%
16.9%UK£7.75UK£4.00UK£4.438
Sep ’24UK£5.24
UK£6.30
+20.3%
17.0%UK£7.75UK£4.00UK£4.957
Aug ’24UK£5.74
UK£6.34
+10.4%
17.0%UK£7.75UK£4.00UK£5.207
Jul ’24UK£5.72
UK£6.13
+7.2%
14.7%UK£6.75UK£4.00UK£4.867
Jun ’24UK£5.64
UK£6.13
+8.7%
14.7%UK£6.75UK£4.00UK£4.887
May ’24UK£6.00
UK£6.13
+2.2%
14.7%UK£6.75UK£4.00UK£4.557
Apr ’24UK£5.54
UK£6.04
+9.0%
14.5%UK£6.75UK£4.00UK£4.578
Mar ’24UK£5.65
UK£5.59
-1.1%
13.2%UK£6.60UK£4.00UK£4.228
Feb ’24UK£5.20
UK£5.59
+7.5%
13.2%UK£6.60UK£4.00UK£4.328
Jan ’24UK£4.81
UK£5.34
+11.1%
15.0%UK£6.60UK£4.00UK£4.908
Dec ’23UK£4.64
UK£5.34
+15.1%
15.0%UK£6.60UK£4.00UK£4.718

Analyst Forecast: Target price is more than 20% higher than the current share price, but analysts are not within a statistically confident range of agreement.

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Company Analysis and Financial Data Status

DataLast Updated (UTC time)
Company Analysis2024/12/18 18:32
End of Day Share Price 2024/12/18 00:00
Earnings2024/06/30
Annual Earnings2024/06/30

Data Sources

The data used in our company analysis is from S&P Global Market Intelligence LLC. The following data is used in our analysis model to generate this report. Data is normalised which can introduce a delay from the source being available.

PackageDataTimeframeExample US Source *
Company Financials10 years
  • Income statement
  • Cash flow statement
  • Balance sheet
Analyst Consensus Estimates+3 years
  • Forecast financials
  • Analyst price targets
Market Prices30 years
  • Stock prices
  • Dividends, Splits and Actions
Ownership10 years
  • Top shareholders
  • Insider trading
Management10 years
  • Leadership team
  • Board of directors
Key Developments10 years
  • Company announcements

* example for US securities, for non-US equivalent regulatory forms and sources are used.

Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.

Analysis Model and Snowflake

Details of the analysis model used to generate this report is available on our Github page, we also have guides on how to use our reports and tutorials on Youtube.

Learn about the world class team who designed and built the Simply Wall St analysis model.

Industry and Sector Metrics

Our industry and section metrics are calculated every 6 hours by Simply Wall St, details of our process are available on .

Analyst Sources

Ricardo plc is covered by 18 analysts. 7 of those analysts submitted the estimates of revenue or earnings used as inputs to our report. Analysts submissions are updated throughout the day.

AnalystInstitution
null nullArden Partners Plc.
James BaylissBerenberg
Richard HickinbothamCharles Stanley Securities