Rockwell Automation, Inc (ROK) stock analysis

P/E above its 5-year median

Rockwell Automation's P/E of 38.1 is above its own 5-year median of 33.1.

P/E above the industry

Rockwell Automation's P/E of 38.1 is above the Laboratory Apparatus and Analytical, Optical, Measuring, and Controlling Instruments median of 36.5.

EV/EBITDA against its history

Needs positive EBITDA and price history.

P/B above the industry

Rockwell Automation's price-to-book of 12.91 is above the Laboratory Apparatus and Analytical, Optical, Measuring, and Controlling Instruments median of 3.17.

Trading below fair value

The share price of $406.19 is below our fair value estimate of $421.37.

Margin of safety under 20%

The price is 3.6% below fair value, less than the 20% cushion we look for.

Revenue growing under 10% a year

Revenue grew 2.4% a year over the last three fiscal years, short of the 10% we look for.

EPS growing under 10% a year

Diluted EPS grew -1.3% a year over the last three fiscal years.

Earnings growth accelerating

Net income grew 23.7% over the last twelve months, against a 5-year average of -3.2% a year.

Growing faster than the industry

Revenue grew 11.3% over the last twelve months; the Laboratory Apparatus and Analytical, Optical, Measuring, and Controlling Instruments median is 8.4%.

Guidance raised

Rockwell Automation raised its fiscal 2026 Organic sales growth outlook on Aug 4, 2026.

Gross margin slipping

Gross margin was 49.1% over the last twelve months, against 53.6% a year earlier.

Return on equity over 15%

Return on equity was 34.5% over the last twelve months and averaged 42.3% over five years.

Return on capital over 10%

Return on invested capital was 26.6%, above the 10% that usually covers the cost of capital.

Return on equity above the industry

Rockwell Automation's return on equity of 34.5% is above the Laboratory Apparatus and Analytical, Optical, Measuring, and Controlling Instruments median of 1.1%.

Earnings shrank over 5 years

Net income shrank 3.2% a year on average over the last five fiscal years.

Net margin below its 5-year average

Net margin was 13.4% over the last twelve months, against a 5-year average of 13.7%.

Net margin above the industry

Rockwell Automation's net margin of 13.4% is above the Laboratory Apparatus and Analytical, Optical, Measuring, and Controlling Instruments median of -1.3%.

High debt

Debt is 93.2% of shareholders' equity, above the 40% we consider low.

Debt falling against equity

Debt to equity fell from 195% five years ago to 93.2%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 53.2% of total debt.

Interest well covered

Operating income covers interest expense 14.7 times.

Short-term assets cover short-term debts

Current assets are 1.08 times current liabilities.

Low bankruptcy risk

The Altman Z-score is 5.75; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Rockwell Automation paid dividends worth 1.4% of the share price over the last twelve months.

Yield below Treasuries

The 1.4% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; Rockwell Automation yields 1.4%.

Dividend not cut

The dividend per share has not fallen by more than 10% in any of the last 10 fiscal years.

Covered by earnings

Dividends take 50.9% of net income.

Covered by free cash flow

Dividends take 40.6% of free cash flow.