Rational AG stock drops over 6% as growth outlook moderates

Published 27/03/2025, 10:32

Investing.com -- Shares of  Rational AG (ETR:RAAG) declined more than 6% on Thursday following the company’s fourth-quarter earnings report, which showed that while earnings per share were boosted by a lower tax rate, revenue growth came in softer than expected. 

Rational’s revenue increased by 6% year-over-year in the quarter, which was below expectations. According to the RBC note, the Americas remained a key driver for Rational’s business, while growth in Europe was weaker. 

The company’s gross margin remained stable, but the lower-than-expected revenue growth was a key concern. 

The tax rate benefit helped deliver an EPS beat, but analysts emphasized that this was a one-time factor rather than an indication of stronger operational performance.

Rational’s management provided guidance that suggested a slightly more muted growth trajectory. 

While the company continues to see demand for its products, RBC analysts pointed out that the 2025 outlook appears somewhat more moderate than in previous years. 

Factors such as economic uncertainty and cautious spending patterns could impact growth potential.

While Rational remains a well-established player in its industry, the softer-than-expected revenue growth and cautious guidance contributed to the share price decline. RBC analysts suggested that these factors could weigh on sentiment in the near term.

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