Business Snapshot
- Revenue TrendDecelerating
- Profitability TrendDeteriorating
- Balance Sheet StrengthWeak
- Cash GenerationStrong
Educational tool only – Scores are based on historical data and financial metrics for informational purposes. This is not financial advice or a recommendation to buy or sell any security. Always conduct your own research or consult a qualified financial adviser.
QinetiQ Group plc provides science and technology solution in the defense, security, and infrastructure markets in the United Kingdom, the United States, Australia, and internationally. The company operates through EMEA Services and Global Solutions segments. The company is listed on the LSE in UK, operating in the Industrials sector, with a market capitalisation of 2.62B.
Analysis The scoring profile indicates limited reward potential at this time, with growth and momentum offering the most support. Risk indicators are moderate, consistent with typical market exposure.
For informational purposes only. Not financial advice.
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Balanced ownership with meaningful insider stakes and moderate institutional participation.
Insiders own 14.8%, which suggests meaningful management commitment to the business.
Institutions own 59.5%, which suggests a balanced ownership mix.
Public float is 25.7%, which points to a fairly balanced ownership structure.
Our reward rating analyses QQ's potential upside using 5 weighted factors. Each factor is scored 0-100, then combined using the weights shown below.
Growth measures the company's ability to expand its business over time through revenue, earnings, and cash flow generation.
QQ scored 55/100 for growth — blending a 3-year historical track record (60%) with analyst forward estimates (40%). Historical revenue CAGR of 13.5% is solid. Forward: analysts forecast 3.3% revenue growth next year, EPS expected to grow 13.6%. Overall a solid growth profile with positive momentum.
Momentum is assessed relative to the FTSE 100 benchmark where available. Relative outperformance is a stronger signal than absolute return alone.
Insufficient price history to assess momentum. Score defaulted to neutral (50).
Profitability examines both the current margin level and margin expansion trends. High and expanding margins indicate pricing power and operational efficiency.
QQ scores 48/100 for profitability, assessed sector-relative on margins and via absolute thresholds for capital efficiency. Gross margin of 100.0% is 122% above the sector average of 45% — indicating strong pricing power and competitive moat. The company is currently loss-making with a net margin of -9.6%. FCF conversion of >200% confirms high earnings quality — reported profits are well-backed by cash. Profitability is modest — margin improvement is the key lever to unlock higher returns.
Valuation is scored sector-relative — each metric is compared against the typical multiple for this industry, so a high P/E in Healthcare is judged differently to a high P/E in Energy. PEG and Price/FCF use absolute thresholds.
QQ received a valuation score of 33/100 using sector-relative scoring. A PEG of 1.23 shows growth reasonably supports the current price. Its Forward P/E of 15.3x is 15% below the sector average of 18x. EV/EBITDA of 95.3x sits 694% above the sector norm of 12x. Price/FCF of 23.3x is reasonable. Leverage is stretched at 5.3x Net Debt/EBITDA — this has applied a penalty to the valuation score. Overall the stock trades at a premium to sector peers, leaving limited margin of safety.
Educational Tool Only
The reward rating and analysis shown above are based on historical financial data and quantitative metrics, provided for informational and educational purposes only. This is not financial advice and should not be interpreted as a recommendation to buy, sell, or hold any security. Past performance does not guarantee future results. Always conduct your own research or consult a qualified financial adviser before making investment decisions.
Our risk rating assesses QQ's downside potential using 4 weighted factors. Each factor is scored 0-100 (higher = riskier), then combined using the weights shown below.
Financial Solvency measures the company's ability to service and repay its debt obligations. Five sub-metrics are weighted to produce the composite score.
QQ has a financial solvency risk score of 70/100. This signals high leverage risk. Interest coverage is -3.8x—earnings barely cover debt service. Net debt is 5.3x EBITDA, well above the 3x warning threshold. Heavily leveraged companies face refinancing risk and are highly sensitive to rising rates or an earnings miss.
Operational Quality measures bottom-line efficiency, cash generation, capital productivity, and margin consistency — four equally weighted signals of business model resilience.
QQ scores 46/100 for operational quality, indicating elevated operational risk. The company shows positive FCF margin of 5.8%, exceptional capital efficiency — Cash ROA of 12.1% is a standout metric. Key concerns: a negative net margin of -9.6% — the company is loss-making; moderate margin variance of ±7.3pp over 3 years. Overall the business is viable but not without risk. Investors should monitor whether margins are improving or deteriorating quarter on quarter.
Volatility measures price instability, worst-case drawdowns, and sensitivity to broader market moves.
QQ has a volatility risk score of 5/100. This indicates exceptional price stability — almost bond-like for an equity. Such stability is rare and appeals to risk-averse investors seeking equity exposure with minimal turbulence.
Size factor captures existential risk. Smaller companies have higher failure rates, less diversification, and greater vulnerability to shocks.
QQ has a market cap of £2.6B (Mid Cap), resulting in a size risk score of 35/100. As a large-cap company, it has minimal size-related risk. Large companies benefit from scale, diversified operations, established brands, and easier access to capital. While not immune to failure, they have resources to navigate challenges and lower statistical failure rates. Size provides stability and reduces existential risk, though it may limit explosive growth potential.
Educational Tool Only
The risk rating and analysis shown above are based on historical financial data and quantitative metrics, provided for informational and educational purposes only. This is not financial advice and should not be interpreted as a recommendation to buy, sell, or hold any security. Past performance does not guarantee future results. Always conduct your own research or consult a qualified financial adviser before making investment decisions.
Forward-looking estimates from the analyst community for QQ.
Reported revenue for the last 5 years, followed by low, consensus, and high analyst revenue estimates for the next two years. Consensus revenue implies +5.7% YoY growth tight ranges on revenue estimates
Low, consensus, and high analyst EPS estimates for the next two fiscal years. Consensus EPS implies +13.7% YoY growth tight ranges on EPS estimates