LSE:RCDO

Stock Analysis Report

Executive Summary

Ricardo plc primarily provides engineering, technical, environmental, and strategic consultancy services for transportation original equipment manufacturers and operators, energy companies, financial institutions, and government agencies.

Snowflake

Fundamentals

Excellent balance sheet established dividend payer.


Similar Companies

Share Price & News

How has Ricardo's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

1.4%

LSE:RCDO

-0.3%

GB Professional Services

0.4%

GB Market


1 Year Return

-7.8%

LSE:RCDO

10.3%

GB Professional Services

-6.2%

GB Market

RCDO underperformed the Professional Services industry which returned 10.3% over the past year.

RCDO underperformed the Market in United Kingdom of Great Britain and Northern Ireland which returned -6.2% over the past year.


Share holder returns

RCDOIndustryMarket
7 Day1.4%-0.3%0.4%
30 Day0.6%-1.2%-5.2%
90 Day-9.6%3.9%-2.3%
1 Year-5.0%-7.8%12.8%10.3%-1.7%-6.2%
3 Year-5.7%-12.2%51.0%40.5%16.8%2.9%
5 Year25.0%11.6%115.4%90.1%24.2%-2.3%

Price Volatility Vs. Market

How volatile is Ricardo's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Ricardo undervalued based on future cash flows and its price relative to the stock market?

38%

Discount to future cash flow value


Intrinsic Value Based on Future Cash Flows

Ricardo's share price is below the future cash flow value, and at a moderate discount (> 20%).

Ricardo's share price is below the future cash flow value, but not at a substantial discount (< 40%).


Price Based on Earnings

Ricardo is overvalued based on earnings compared to the GB Professional Services industry average.

Ricardo is overvalued based on earnings compared to the United Kingdom of Great Britain and Northern Ireland market.


Price Based on Expected Growth

Ricardo is poor value based on expected growth next year.


Price Based on Value of Assets

Ricardo is good value based on assets compared to the GB Professional Services industry average.


Next Steps

Future Growth

How is Ricardo expected to perform in the next 1 to 3 years based on estimates from 6 analysts?

17.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Estimates


Future Annual Growth Analysis

Ricardo's revenue is expected to grow by 5% yearly, however this is not considered high growth (20% yearly).

Ricardo's earnings are expected to grow by 17.1% yearly, however this is not considered high growth (20% yearly).

Ricardo's revenue growth is expected to exceed the United Kingdom of Great Britain and Northern Ireland market average.

Ricardo's earnings growth is expected to exceed the United Kingdom of Great Britain and Northern Ireland market average.

Ricardo's earnings growth is expected to exceed the low risk savings rate of 1.2%.


Earnings per Share Growth Estimates


Future Return on Equity

Ricardo is not expected to efficiently use shareholders’ funds in the future (Return on Equity less than 20%).


Next Steps

Past Performance

How has Ricardo performed over the past 5 years?

2.3%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Ricardo's year on year earnings growth rate has been positive over the past 5 years, however the most recent earnings are below average.

Ricardo's 1-year earnings growth is negative, it can't be compared to the 5-year average.

Ricardo's 1-year earnings growth is negative, it can't be compared to the GB Professional Services industry average.


Return on Equity

Ricardo has not efficiently used shareholders’ funds last year (Return on Equity less than 20%).


Return on Assets

Ricardo used its assets less efficiently than the GB Professional Services industry average last year based on Return on Assets.


Return on Capital Employed

Ricardo has improved its use of capital last year versus 3 years ago (Return on Capital Employed).


Next Steps

Financial Health

How is Ricardo's financial position?


Financial Position Analysis

Ricardo is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.

Ricardo's cash and other short term assets cover its long term commitments.


Debt to Equity History and Analysis

Ricardo's level of debt (39.6%) compared to net worth is satisfactory (less than 40%).

Unable to establish if Ricardo's debt level has increased without past 5-year debt data.

Debt is well covered by operating cash flow (33.9%, greater than 20% of total debt).

Interest payments on debt are well covered by earnings (EBIT is 19.5x coverage).


Balance Sheet

Low level of unsold assets.

Debt is covered by short term assets, assets are 3x debt.


Next Steps

Dividend

What is Ricardo's current dividend yield, its reliability and sustainability?

3.15%

Expected Dividend Yield


Dividend Yield and Payments Analysis

Ricardo's pays a higher dividend yield than the bottom 25% of dividend payers in United Kingdom of Great Britain and Northern Ireland (2.05%).

Ricardo's dividend is below the markets top 25% of dividend payers in United Kingdom of Great Britain and Northern Ireland (5.65%).

Dividends per share have been stable in the past 10 years.

Dividends per share have increased over the past 10 years.


Current Payout to Shareholders

Dividends paid are covered by earnings (1.7x coverage).


Future Payout to Shareholders

Dividends after 3 years are expected to be well covered by earnings (2.8x coverage).


Next Steps

Management

What is the CEO of Ricardo's salary, the management and board of directors tenure and is there insider trading?

7.6yrs

Average management tenure


CEO

Dave Shemmans (53yo)

13.8yrs

Tenure

UK£1,411,000

Compensation

Mr. David Shemmans, also known as Dave, BEng has been a Managing Director of International Operations and Executive Director of Ricardo Plc since February 18, 2005. Mr. Shemmans has been the Chief Executiv ...


CEO Compensation Analysis

Dave's remuneration is higher than average for companies of similar size in United Kingdom of Great Britain and Northern Ireland.

Dave's compensation has been consistent with company performance over the past year, both up more than 20%.


Management Age and Tenure

7.6yrs

Average Tenure

55yo

Average Age

The average tenure for the Ricardo management team is over 5 years, this suggests they are a seasoned and experienced team.


Board Age and Tenure

4.5yrs

Average Tenure

58.5yo

Average Age

The tenure for the Ricardo board of directors is about average.


Insider Trading

No 3 month open market individual insider trading information.


Recent Insider Transactions

BuyUK£4,87909 Nov 18
Laurie Bowen
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares672
Max PriceUK£7.26
BuyUK£9,37608 Nov 18
Laurie Bowen
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares1,328
Max PriceUK£7.06

Ownership Breakdown


Management Team

  • Ian Gibson (59yo)

    CFO & Director

    • Tenure: 6.1yrs
    • Compensation: UK£741.00k
  • Dave Shemmans (53yo)

    CEO, MD of International Operations & Executive Director

    • Tenure: 13.8yrs
    • Compensation: UK£1.41m
  • Neville Jackson

    Chief Technology & Innovation Officer

    • Tenure: 9.6yrs
  • Tom Gutwald

    Managing Director of Ricardo Innovations

    • Tenure: 5.1yrs
  • Mark Garrett (56yo)

    COO & Executive Director

    • Tenure: 11.1yrs
    • Compensation: UK£604.00k
  • Patricia Ryan (54yo)

    Group General Counsel & Company Secretary

    • Tenure: 14.6yrs
  • Chris Barnes

    Managing Director of Software

    • Tenure: 3.0yrs
  • Paul Seller

    Managing Director of Ricardo Rail

    • Tenure: 4.1yrs
  • Timothy Hargreaves

    Group Human Resources Director

    • Tenure: 0.0yrs
  • Mark Jarvis

    Group Head of Remuneration & Pensions

    • Tenure: 0.0yrs

Board Members

  • Ian Gibson (59yo)

    CFO & Director

    • Tenure: 6.1yrs
    • Compensation: UK£741.00k
  • Malin Persson (51yo)

    Independent Non-Executive Director

    • Tenure: 3.6yrs
    • Compensation: UK£53.00k
  • Bill Spencer (59yo)

    Independent Non-Executive Director

    • Tenure: 2.3yrs
    • Compensation: UK£52.00k
  • Dave Shemmans (53yo)

    CEO, MD of International Operations & Executive Director

    • Tenure: 13.8yrs
    • Compensation: UK£1.41m
  • Terry Morgan (70yo)

    Non-Executive Chairman

    • Tenure: 4.8yrs
    • Compensation: UK£147.00k
  • Laurie Bowen (58yo)

    Independent Non-Executive Director

    • Tenure: 4.1yrs
    • Compensation: UK£94.00k
  • Mark Garrett (56yo)

    COO & Executive Director

    • Tenure: 11.1yrs
    • Compensation: UK£604.00k
  • Peter Gilchrist (67yo)

    Senior Independent Director

    • Tenure: 4.1yrs
    • Compensation: UK£64.00k

Company Information

Ricardo plc's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Ricardo plc
  • Ticker: RCDO
  • Exchange: LSE
  • Founded: 1915
  • Industry: Research and Consulting Services
  • Sector: Commercial Services
  • Market Cap: UK£381.058m
  • Shares outstanding: 53.37m
  • Website: https://www.ricardo.com

Number of Employees


Location

  • Ricardo plc
  • Shoreham Technical Centre
  • Shoreham-by-Sea
  • West Sussex
  • BN43 5FG
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
RCDOLSE (London Stock Exchange)YesOrdinary SharesGBGBPJan 1992
RCDO.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJan 1992
RIRDB (Deutsche Boerse AG)YesOrdinary SharesDEEURJan 1992
RCDOlBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPJan 1992

Biography

Ricardo plc primarily provides engineering, technical, environmental, and strategic consultancy services for transportation original equipment manufacturers and operators, energy companies, financial insti ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/08/25 20:33
End of Day Share Price2019/08/23 00:00
Earnings2018/12/31
Annual Earnings2018/06/30


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.