Rentokil Initial plc
Rentokil Initial plc Fundamental Analysis
Rentokil Initial plc (RKLIF) shows weak financial fundamentals with a PE ratio of 39.24, profit margin of 7.04%, and ROE of 6.51%. The company generates $4.3B in annual revenue with weak year-over-year growth of -3.57%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 23.2/100 based on profitability, valuation, growth, and balance sheet metrics. The F grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze RKLIF's fundamental strength across five key dimensions:
Efficiency Score
WeakRKLIF struggles to generate sufficient returns from assets.
Valuation Score
ModerateRKLIF shows balanced valuation metrics.
Growth Score
ModerateRKLIF shows steady but slowing expansion.
Financial Health Score
ModerateRKLIF shows balanced financial health with some risks.
Profitability Score
WeakRKLIF struggles to sustain strong margins.
Key Financial Metrics
Is RKLIF Expensive or Cheap?
P/E Ratio
RKLIF trades at 39.24 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, RKLIF's PEG of 1.11 indicates fair valuation.
Price to Book
The market values Rentokil Initial plc at 2.93 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 10.36 times EBITDA. This signals the market has high growth expectations.
How Well Does RKLIF Make Money?
Net Profit Margin
For every $100 in sales, Rentokil Initial plc keeps $7.04 as profit after all expenses.
Operating Margin
Core operations generate 12.00 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $6.51 in profit for every $100 of shareholder equity.
ROA
Rentokil Initial plc generates $2.84 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Rentokil Initial plc produces operating cash flow of $599.86M, showing steady but balanced cash generation.
Free Cash Flow
Rentokil Initial plc generates strong free cash flow of $474.35M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $0.19 in free cash annually.
FCF Yield
RKLIF converts 4.01% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
39.24
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
1.11
vs 25 benchmark
P/B Ratio
Price to book value ratio
2.93
vs 25 benchmark
P/S Ratio
Price to sales ratio
2.75
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
1.12
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.16
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.07
vs 25 benchmark
ROA
Return on assets percentage
0.03
vs 25 benchmark
ROCE
Return on capital employed
0.06
vs 25 benchmark
How RKLIF Stacks Against Its Sector Peers
| Metric | RKLIF Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 39.24 | 25.55 | Worse (Expensive) |
| ROE | 6.51% | 1262.00% | Weak |
| Net Margin | 7.04% | -42065.00% (disorted) | Weak |
| Debt/Equity | 1.12 | 0.79 | Weak (High Leverage) |
| Current Ratio | 1.16 | 10.09 | Neutral |
| ROA | 2.84% | -1502268.00% (disorted) | Weak |
RKLIF outperforms its industry in 0 out of 6 key metrics, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Rentokil Initial plc's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
37.97%
Industry Style: Cyclical, Value, Infrastructure
High GrowthEPS CAGR
40.78%
Industry Style: Cyclical, Value, Infrastructure
High GrowthFCF CAGR
0.02%
Industry Style: Cyclical, Value, Infrastructure
Growing