Regal Rexnord Corp (RRX) stock analysis

P/E above its 5-year median

Regal Rexnord's P/E of 37.7 is above its own 5-year median of 33.6.

P/E above the industry

Regal Rexnord's P/E of 37.7 is above the General Industrial Machinery and Equipment median of 26.9.

EV/EBITDA above its 5-year median

Regal Rexnord's EV/EBITDA of 23.1 is above its 5-year median of 18.3.

P/B below the industry

Regal Rexnord's price-to-book of 1.76 is below the General Industrial Machinery and Equipment median of 2.84.

Trading above fair value

The share price of $182.71 is above our fair value estimate of $141.87.

Margin of safety under 20%

The price is 28.8% above fair value, so there is no margin of safety.

Revenue growing under 10% a year

Revenue grew 4.4% a year over the last three fiscal years, short of the 10% we look for.

EPS growing under 10% a year

Diluted EPS grew -16.8% a year over the last three fiscal years.

Earnings growth accelerating

Net income grew 29.4% over the last twelve months, against a 5-year average of 8.3% a year.

Growing slower than the industry

Revenue grew 3.5% over the last twelve months; the General Industrial Machinery and Equipment median is 12.4%.

Guidance lowered

Regal Rexnord lowered its 2026 GAAP Diluted Earnings Per Share outlook on May 7, 2026.

Gross margin improving

Gross margin was 37.8% over the last twelve months, against 36.9% a year earlier.

Return on equity under 15%

Return on equity was 4.8% over the last twelve months and averaged 3.9% over five years; we look for 15% on both.

Return on capital under 10%

Return on invested capital was 5.2%, below the 10% that usually covers the cost of capital.

Return on equity below the industry

Regal Rexnord's return on equity of 4.8% is below the General Industrial Machinery and Equipment median of 9.9%.

Earnings grew over 5 years

Net income grew 8.3% a year on average over the last five fiscal years.

Net margin above its 5-year average

Net margin was 5.4% over the last twelve months, against a 5-year average of 4.5%.

Net margin below the industry

Regal Rexnord's net margin of 5.4% is below the General Industrial Machinery and Equipment median of 8.0%.

High debt

Debt is 66.7% of shareholders' equity, above the 40% we consider low.

Debt rising against equity

Debt to equity rose from 42.1% five years ago to 66.7%.

Debt not well covered by cash flow

Operating cash flow over the last twelve months equals 12.1% of total debt; we look for at least 20%.

Interest not well covered

Operating income covers interest expense 2.1 times; we look for at least 5.

Short-term assets cover short-term debts

Current assets are 2.28 times current liabilities.

Bankruptcy risk in the grey zone

The Altman Z-score is 2.06; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Regal Rexnord paid dividends worth 0.8% of the share price over the last twelve months.

Yield below Treasuries

The 0.8% 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; Regal Rexnord yields 0.8%.

Dividend was cut

The dividend per share fell by more than 10% at least once in the last 10 fiscal years.

Covered by earnings

Dividends take 28.7% of net income.

Covered by free cash flow

Dividends take 19.9% of free cash flow.