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RBC Bearings Incorporated (RBC) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

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RBC Bearings Incorporated (RBC)

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Intrinsic Value (DCF)

Current$497.06
→
Intrinsic$181.67
-63%
$113.46$181.67$311.21
Current price reflects execution expectations above 18% growth — not unreasonable for quality businesses.
Range: Bear $113 → Bull $311. Current price implies expectations above the base case, closer to bull expectations.
Current price reflects assumptions at the upper end of our valuation range (bull case: $311).
Discount ↓Growth →14%16%18%20%
8%$227$249$273$298
10%$150$166$182$199
12%$108$119$131$144
14%$81$90$99$109

Bull Case

  • Bull case ($311) with 21% growth, 9% discount rate

Bear Case

  • Bear case ($113) implies 77% downside at 14% growth, 12% discount
  • Trading 63% above base case — execution must exceed assumptions to justify
  • Price exceeds bull case ($311) — requires exceptional execution
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5-Year Free Cash Flow Projection

Year 1$286.71M
Year 2$337.17M
Year 3$396.52M
Year 4$466.31M
Year 5$548.39M
Terminal$8.07B

📐 Model Inputs

Growth Rate17.6%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$243.80MTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.

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Frequently Asked Questions

Is RBC stock undervalued or overvalued?
🔴 OVERVALUED

RBC trades at $497.06 vs. our DCF-derived intrinsic value of $181.67, implying -62% downside. Using a 10.0% WACC and 17.6% FCF growth assumption, the current price requires growth rates above our estimates to be justified. Even our bull case ($284.62) suggests limited upside.

What is RBC's intrinsic value?

Using a 5-year DCF model: Base FCF of $244M, projected at 17.6% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 10.0% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $992M net debt and dividing by 0.03B shares: Bear $110.55 | Base $181.67 | Bull $284.62. Current price $497.06 implies -62% to base case.

How is RBC's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 17.6% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=10.0%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($6.51B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 26.7x.