RLX Technology Inc. Fundamental Analysis (NYSE: RLX)
RLX Technology Inc. (NYSE: RLX) shows strong financial fundamentals with a PE ratio of 14.53, profit margin of 21.86%, and ROE of 6.20%. The company generates $4.5B in annual revenue with strong year-over-year growth of 43.94%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 71.6/100 based on profitability, valuation, growth, and balance sheet metrics. The B grade reflects solid fundamentals with room for improvement in valuation or growth.
Fundamental Health Score
We analyze RLX's fundamental strength across five key dimensions:
Efficiency Score
WeakRLX struggles to generate sufficient returns from assets.
Valuation Score
ExcellentRLX trades at attractive valuation levels.
Growth Score
ExcellentRLX delivers strong and consistent growth momentum.
Financial Health Score
ExcellentRLX maintains a strong and stable balance sheet.
Profitability Score
ModerateRLX maintains healthy but balanced margins.
Key Financial Metrics
Is RLX Expensive or Cheap?
P/E Ratio
RLX trades at 14.53 times earnings. This suggests potential undervaluation.
PEG Ratio
When adjusting for growth, RLX's PEG of 0.06 indicates potential undervaluation.
Price to Book
The market values RLX Technology Inc. at 0.92 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 16.63 times EBITDA. This signals the market has high growth expectations.
How Well Does RLX Make Money?
Net Profit Margin
For every $100 in sales, RLX Technology Inc. keeps $21.86 as profit after all expenses.
Operating Margin
Core operations generate 13.04 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $6.20 in profit for every $100 of shareholder equity.
ROA
RLX Technology Inc. generates $5.80 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
RLX Technology Inc. produces operating cash flow of $533.98M, showing steady but balanced cash generation.
Free Cash Flow
RLX Technology Inc. produces free cash flow of $415.64M, offering steady but limited capital for shareholder returns and expansion.
FCF Per Share
Each share generates $0.34 in free cash annually.
FCF Yield
RLX converts 2.94% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
14.53
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
0.06
vs 25 benchmark
P/B Ratio
Price to book value ratio
0.92
vs 25 benchmark
P/S Ratio
Price to sales ratio
3.17
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.02
vs 25 benchmark
Current Ratio
Current assets to current liabilities
10.61
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.06
vs 25 benchmark
ROA
Return on assets percentage
0.06
vs 25 benchmark
ROCE
Return on capital employed
0.04
vs 25 benchmark
How RLX Stacks Against Its Sector Peers
| Metric | RLX Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 14.53 | 20.80 | Better (Cheaper) |
| ROE | 6.20% | 624.00% | Weak |
| Net Margin | 21.86% | -2493.00% (disorted) | Strong |
| Debt/Equity | 0.02 | 0.83 | Strong (Low Leverage) |
| Current Ratio | 10.61 | 2.25 | Strong Liquidity |
| ROA | 5.80% | 299.00% | Weak |
RLX outperforms its industry in 4 out of 6 key metrics, particularly excelling in Net Margin, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews RLX Technology Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
16.94%
Industry Style: Defensive, Dividend, Low Volatility
High GrowthEPS CAGR
988.63%
Industry Style: Defensive, Dividend, Low Volatility
High GrowthFCF CAGR
-45.85%
Industry Style: Defensive, Dividend, Low Volatility
Declining