Regal Rexnord Corporation (RRX)
Valuation Overview•Is Regal Rexnord Corporation Overvalued or Undervalued?
Trading at a discount compared to peers, but the underlying intrinsic cash flows struggle to support the current price.
Moderate quality score of 54/100, reflecting stable operating margins and manageable leverage.
Wall Street forecasts a balanced outlook with consensus price targets near the current price.
Verdict: Average quality business weighed down by significant profitability concerns.
Wall Street is broadly bullish, projecting solid upside alongside robust expected earnings growth. However, capital return yields remain modest, anchored by a strong, well-covered dividend yield.
RRX struggles with subpar profitability and pressured margins. However, the balance sheet carries elevated leverage, requiring careful monitoring of debt servicing capabilities.
The company exhibits steady, low-single-digit revenue growth however, earnings have severely contracted over the same period. Operating efficiency remains adequate with margins around 11.3%.
| Financial Metric | Trend (12Q) | Latest Qtr | 1Y Growth | 3Y CAGR | 5Y CAGR | 10Y CAGR |
|---|---|---|---|---|---|---|
| Revenue | $1.5B | -1.6% | +4.4% | +15.3% | +5.4% | |
| EBITDA | $276.6M | — | +3.9% | — | — | |
| Net Income | $64.3M | +42.5% | -17.0% | — | +6.9% | |
| EPS (Diluted) | $0.96 | +43.5% | -16.7% | -1.9% | +2.9% | |
| Free Cash Flow | -$2.5M | +78.7% | +36.3% | +18.2% | — |
| Metric | TTM | 3Y Avg | 5Y Avg | 10Y Avg |
|---|---|---|---|---|
| Gross Margin | 37.5% | 35.8% | 33.6% | 30.5% |
| Operating Margin | 11.3% | 10.8% | 11.1% | 10.9% |
| Net Margin | 4.8% | 2.3% | 4.5% | 5.5% |
| FCF Margin | 13.4% | 11.0% | 9.5% | 9.7% |
| Quarter | EPS Est. | EPS Act. | Surprise | EPS | Rev |
|---|---|---|---|---|---|
| Q2'26Latest | $2.11 | $2.17 | +2.8% | ||
| Q1'26 | $2.47 | $2.51 | +1.6% | ||
| Q4'25 | $2.56 | $2.51 | -2.0% | ||
| Q3'25 | $2.42 | $2.48 | +2.5% | ||
| Q2'25 | $1.82 | $2.15 | +18.1% | ||
| Q1'25 | $2.56 | $2.34 | -8.6% | ||
| Q4'24 | $2.48 | $2.49 | +0.4% | ||
| Q3'24 | $2.14 | $2.29 | +7.0% |
Total return is +63.4% (1Y), outperforming the benchmark by +38.4%
| Period | Total Return | vs S&P 500 (Alpha) | Dividend Contribution |
|---|---|---|---|
| YTD | +55.5% | +46.2% | — |
| 1Y | +63.4% | +38.4% | +1.0% |
| 3YCAGR | +14.8% | -5.6% | +2.8% |
| 5YCAGR | +13.9% | +0.4% | +11.3% |
| 10YCAGR | +15.5% | +1.6% | — |
The S&P 500 is at 31.3x trailing P/E — Expensive relative to historical averages.
Quick answers to common questions about Regal Rexnord Corporation (RRX) valuation, health, and returns.
Regal Rexnord Corporation is estimated to be overvalued under our discounted cash flow framework. relative multiples indicate the stock is Cheap versus peers compared to industry peers. overvalued (implying -47.3% downside from DCF intrinsic value of $119.40)
Regal Rexnord Corporation has multiple valuation anchors: DCF Intrinsic Value: $119.40 | Peer Relative Fair Value: $327.88 | Wall Street Analyst Target: $245.00 (implying +8.0% upside). A convergence of these signals offers higher conviction.
Regal Rexnord Corporation displays fair financial health with a composite quality score of 54/100, supported by a Altman Z-Score of 1.7 (distress zone), Piotroski F-Score of 7/9, Return on Invested Capital (ROIC) of 4.5%.
Regal Rexnord Corporation pays a 0.6% dividend yield, covered by a 33% payout ratio with 0 years of growth, supplemented by a 0.0% buyback yield.
Regal Rexnord Corporation's current growth trajectory is Decelerating. The company achieved -1.6% 1Y revenue growth and +43.5% 1Y EPS growth, compared to its 3Y revenue CAGR of +4.4%.
Wall Street consensus is Buy based on 22 analysts, beating EPS expectations in 75% of recent quarters with a 2-quarter streak. The consensus price target represents a +8.0% change from current levels.
Investment risks for Regal Rexnord Corporation include: -21.7% 1-year max drawdown, high beta (2.06x market volatility), elevated distress risk. Volatility risk is characterized by a beta of 2.06x.
No. These computations are purely quantitative model outputs for informational purposes. They do not account for qualitative management shifts or macro events. Always consult a licensed RIA before buying or selling shares.
Disclaimer: This page is for informational purposes only and does not constitute financial advice. All valuation models, scores, and target estimates are automated computations under stated assumptions and should not be relied upon as the sole basis for any investment decision.