Regal Rexnord Corporation Fundamental Analysis (NYSE: RRX)
Regal Rexnord Corporation (NYSE: RRX) shows weak financial fundamentals with a PE ratio of 34.98, profit margin of 5.35%, and ROE of 4.74%. The company generates $6.1B in annual revenue with weak year-over-year growth of -1.65%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 40.7/100 based on profitability, valuation, growth, and balance sheet metrics. The D grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze RRX's fundamental strength across five key dimensions:
Efficiency Score
WeakRRX struggles to generate sufficient returns from assets.
Valuation Score
ModerateRRX shows balanced valuation metrics.
Growth Score
ModerateRRX shows steady but slowing expansion.
Financial Health Score
ExcellentRRX maintains a strong and stable balance sheet.
Profitability Score
WeakRRX struggles to sustain strong margins.
Key Financial Metrics
Is RRX Expensive or Cheap?
P/E Ratio
RRX trades at 34.98 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, RRX's PEG of 1.17 indicates fair valuation.
Price to Book
The market values Regal Rexnord Corporation at 1.64 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 5.85 times EBITDA. This is generally considered low.
How Well Does RRX Make Money?
Net Profit Margin
For every $100 in sales, Regal Rexnord Corporation keeps $5.35 as profit after all expenses.
Operating Margin
Core operations generate 11.74 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $4.74 in profit for every $100 of shareholder equity.
ROA
Regal Rexnord Corporation generates $2.36 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Regal Rexnord Corporation generates limited operating cash flow of $556.65M, signaling weaker underlying cash strength.
Free Cash Flow
Regal Rexnord Corporation produces free cash flow of $466.09M, offering steady but limited capital for shareholder returns and expansion.
FCF Per Share
Each share generates $7.00 in free cash annually.
FCF Yield
RRX converts 4.12% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
34.98
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
1.17
vs 25 benchmark
P/B Ratio
Price to book value ratio
1.64
vs 25 benchmark
P/S Ratio
Price to sales ratio
1.88
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.69
vs 25 benchmark
Current Ratio
Current assets to current liabilities
2.28
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.05
vs 25 benchmark
ROA
Return on assets percentage
0.02
vs 25 benchmark
ROCE
Return on capital employed
0.06
vs 25 benchmark
How RRX Stacks Against Its Sector Peers
| Metric | RRX Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 34.98 | 30.82 | Worse (Expensive) |
| ROE | 4.74% | 1106.00% | Weak |
| Net Margin | 5.35% | -21242.00% (disorted) | Weak |
| Debt/Equity | 0.69 | 0.79 | Neutral |
| Current Ratio | 2.28 | 21.72 | Strong Liquidity |
| ROA | 2.36% | -1325740.00% (disorted) | Weak |
RRX outperforms its industry in 1 out of 6 key metrics, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Regal Rexnord Corporation's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
25.01%
Industry Style: Cyclical, Value, Infrastructure
High GrowthEPS CAGR
-9.58%
Industry Style: Cyclical, Value, Infrastructure
DecliningFCF CAGR
39.35%
Industry Style: Cyclical, Value, Infrastructure
High Growth