Latest update
$18.49
Updated: Jul 16, 2026, 8:51 PM UTC
Browsing public data
Rolls-Royce Holdings plc, a UK-based company, specializes in mission-critical power systems across Civil Aerospace, Defense, and Power Systems segments. The Civil Aerospace segment, providing aero engines and aftermarket services, is a significant driver. The company demonstrates strong free cash flow growth (+56.8% 3-year CAGR) and high profitability with a 27.5% profit margin and 623.5% ROE. The balance sheet appears robust with light debt, strong debt service coverage, and a stable share count. However, valuation metrics suggest the stock is currently stretched, with a TTM P/E of 20.3x and NTM P/E of 31.3x. Over the past year, sales and cash have increased, but the stock price has outpaced the business fundamentals.
Free cash flow
The cash actually left in the bank after the company has paid for everything and reinvested in itself. Harder to fake than net income.
Latest
↑$3.6B
2025
The most recent reported figure, in the company's own currency and reporting cadence.
QoQ
↑+23.6%
vs 2024
How much this quarter grew compared to last quarter. Useful for spotting acceleration or slowdown in real time.
YoY
•—
How much this quarter grew compared to the same quarter one year ago. Strips out seasonality — a slow holiday quarter looks worse QoQ but normal YoY.
CAGR
•+56.8% annualised
since 2022 · 3.0y
The smooth yearly growth rate that gets you from the starting value to the current value. A 100% CAGR over 3 years means the business tripled, on average, each year.
| Metric | 3 yr | 2 yr | 1 yr |
|---|---|---|---|
| Free cash flow | +56.8% $928M→$3.6B | +42.1% $1.8B→$3.6B | +23.6% $2.9B→$3.6B |
P/E TTM
↓20.3×
Trailing twelve months. Today's price divided by the last year of actual earnings.
P/E NTM
↓31.3×
Next twelve months. Today's price divided by what analysts expect the company to earn over the coming year.
Profitability
↑Strong
Operating margin (and the wider return profile) tells you how efficiently each dollar of sales becomes profit. High and rising = pricing power; low or falling = the business is grinding.
Share count
→Stable
Are the buybacks outrunning the stock-based comp? A shrinking share count means every existing share owns a bigger slice of future earnings.
Debt load
↑Light
Total debt against cash and earnings power (EBITDA). Light debt leaves room to invest and weather downturns; heavy debt shrinks the margin for error.
Debt service
↑Strong
Whether the cash the business generates easily covers its interest and loan payments. Strong here = no forced selling in a bad year.
Cash return at today's price
↓2.3%
Free cash flow divided by market cap — the cash yield you're getting for the price you pay. Above ~6% is rich, below ~3% is thin. P/E shown when the yield is too small to be useful.
While the fundamental picture for Rolls-Royce remains strong, the current price action suggests caution. The stock is consolidating with falling volume and shows recent short-term price weakness. With earnings approaching, combined with a stretched valuation, waiting for clearer directional conviction or a more evident pullback before acting is prudent. The overall cycle remains positive, but tactical patience is key here.
Short-term thesis
Rolls-Royce exhibits robust financial strength, driven by exceptional free cash flow growth and high profitability, particularly from its dominant Civil Aerospace segment. The company's critical role in the civil aerospace value chain, especially with its Trent engine MRO services, underpins its long-term growth trajectory. Despite stretched near-term valuation and recent consolidation in price action, the underlying business quality and secular tailwinds in air travel suggest sustained long-term appreciation. Investors are advised to await more opportune entry points rather than chasing the current market price.
Long-term exposure
Avoid
The business or valuation backdrop is not ready for long-term conviction.
Entry window
Wait
The stock is currently consolidating near its daily moving average with decreasing volume, indicating a potential near-term pause. While the long-term trend remains positive, chasing the stock now carries risk. A more patient approach is warranted, looking for a clear re-establishment of upward momentum or a more favorable entry.
Risk check
Fragile
The downside can widen quickly if this setup goes wrong.
Alignment
Mixed
Neither horizon fully wins, so size and patience matter.
What supports it
What limits it
Long-term thesis
Rolls-Royce stands to benefit significantly from the ongoing global recovery and expansion of air travel, coupled with its indispensable role in civil aircraft engine maintenance and robust defense contracts.
Bottleneck Role
Rolls-Royce acts as a critical bottleneck in the civil aerospace sector through its sole-source Trent engine service. As flying hours increase globally, operators are captive to Rolls-Royce for essential maintenance, repair, and overhaul (MRO) services, guaranteeing substantial long-term revenue streams.
Consensus Blind Spot
The market might be underestimating the stickiness and long-term pricing power of Rolls-Royce's aftermarket services, especially given the embedded nature of their Trent engines and the regulatory burdens of alternative solutions. This creates a predictable and growing annuity-like revenue stream often missed by traditional valuation models focusing on manufacturing.
Demand Gap
The current supply of operational and maintainable large aircraft engines, particularly critical models like the Trent, struggles to meet the surging demand for global air travel. This creates a demand gap that Rolls-Royce is uniquely positioned to fill through its MRO services, leveraging its installed base and proprietary technology.
Demand to Equity Scenarios
Significant slowdown in global air travel (e.g., new pandemic wave, geopolitical shocks)
Demand
-20%
Earnings
-20%
Equity implication
-30%
Reduced engine flying hours lead directly to lower MRO service demand and delayed replacement cycles, impacting civil aerospace revenue.
Continued steady recovery in global air travel; stable defense spending.
Demand
—
Earnings
+10%
Equity implication
+15%
Gradual increase in engine flying hours and consistent defense contracts drive organic growth in both key segments.
Accelerated global air travel recovery, particularly in Asia; increased commercial aircraft replacement cycles.
Demand
+25%
Earnings
+25%
Equity implication
+40%
Rapid acceleration in EFH coupled with fleet modernization efforts boosts MRO and new engine sales, significantly enhancing profitability.
Dependency Chain
Repricing Triggers
Must be true
Thesis broken if
What changed
Signal
Conviction
Long term
Stock
Added since last run
7No longer flagged
0Nothing dropped this run
The prior call to 'WAIT' was accurate, as the stock experienced minimal price movement since the last update. This confirmed the expectation that the stock's upward momentum was extended and a period of consolidation was likely, providing time for a better entry point.
Jul 16, 2026
LatestUpdated Jul 16, 2026, 8:51 PM UTC
Price at review
$18.49
The stock is currently consolidating near its daily moving average with decreasing volume, indicating a potential near-term pause. While the long-term trend remains positive, chasing the stock now carries risk. A more patient approach is warranted, looking for a clear re-establishment of upward momentum or a more favorable entry.
Jun 18, 2026
Updated Jun 18, 2026, 9:42 AM UTC
Price at review
$18.44
The stock has experienced significant upward momentum recently, extending considerably beyond its short-term and medium-term moving averages. While the underlying trend remains positive, this current extension suggests a potential for consolidation or a slight pullback in the very near term as the price normalizes relative to its averages. Patience is advised for a more favorable entry.
Jun 8, 2026
Updated Jun 8, 2026, 11:13 AM UTC
Price at review
$16.77
Price has returned to a logical support level after a necessary cooling-off period.
May 31, 2026
Updated May 31, 2026, 10:52 PM UTC
Price at review
$17.95
The stock is currently chasing new highs but looks overstretched for a new entry today.
May 3, 2026
Updated May 3, 2026, 12:45 PM UTC
Price at review
$16.34
The medium-term trend is still constructive but this week's price action is stuck between support and resistance, with momentum lagging the broader market. It's not a clean entry point right now.