RBC Bearings (RBC) AI Stock Analysis

• Market Cap: $12.00B
• Dividend Yield: N/A
• Average Volume (3M): 156.32K
• Price to Earnings (P/E): 49.6
• Beta (1Y): 0.99
• Revenue Growth: 4.87%
• EPS Growth: 19.66%
• Country: US
• Employees: 5,302
• Sector: Industrials
• Sector Strength: 90
• Industry: Manufacturing - Tools & Accessories
• EPS (TTM): 2.83
• Shares Outstanding: 31,478,058
• 10 Day Avg. Volume: 147,199
• 30 Day Avg. Volume: 156,317
• PEG Ratio: 7.61
• Price to Book (P/B): 3.69
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 42.43
• Enterprise Value/Market Cap: 1.00
• Enterprise Value/Revenue: 1.89
• Enterprise Value/Gross Profit: 17.73
• Enterprise Value/Ebitda: 6.34
• 1Y Price Target: $405.00
• Price Target Upside: 6.24% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4

• Rating: 77 Outperform
• Price Target: $408.00 ▲(7.02%Upside)

RBC Bearings scores well overall due to strong financial performance and strategic corporate actions. While technical indicators suggest bullish momentum, valuation remains a concern with a high P/E ratio. Nonetheless, the company's positive earnings outlook and strategic acquisition plans support a favorable stock assessment.

Positive Factors

Contract Quality

RBC's renegotiated contracts with Boeing and ongoing discussions with Airbus highlight upgraded contract quality and potential content wins in the aerospace sector.

Debt Management

RBC has de-levered to ~1.7x net debt to EBITDA, with expectations for further reduction.

M&A Strategy

The acquisition of VACCO is seen as a strategic move to create attractive opportunities, such as expanding the company's presence on naval defense platforms and within the commercial space market.

Negative Factors

Acquisition Impact

VACCO's current profitability is uncertain and noted to be highly dilutive to its segment's adjusted EBITDA margins, representing a drag on RBC's company level.

Operating Cash Flow

RBC reported operating cash flow of $69mn, below consensus of $160mn and below MSe of $117mn.

RBC Bearings Business Overview & Revenue Model

Company Description

RBC Bearings Incorporated manufactures and markets engineered precision bearings and components in the United States and internationally. It operates through two segments, Aerospace/Defense and Industrial. The company produces plain bearings with self-lubricating or metal-to-metal designs, including rod end bearings, spherical plain bearings, and journal bearings; roller bearings, such as tapered roller bearings, needle roller bearings, and needle bearing track rollers and cam followers, which are anti-friction products that are used in industrial applications and military aircraft platforms; and ball bearings include high precision aerospace, airframe control, thin section, and industrial ball bearings that utilize high precision ball elements to reduce friction in high-speed applications. It also offers mounted bearing products include mounted ball bearings, mounted roller bearings, and mounted plain bearings; and enclosed gearing product lines, including quantis gearmotor, torque arm, tigear, magnagear & maxum, and controlled start transmission. In addition, the company produces power transmission components include mechanical drive components, couplings, and conveyor components; engineered hydraulics and valves for aircraft and submarine applications, and aerospace and defense aftermarket services; fasteners; precision mechanical components, which are used in various general industrial applications; and machine tool collets that are used for holding circulars or rod-like pieces. It serves automotive, tool holding, agricultural and semiconductor machinery, commercial and defense aerospace, ground defense, construction and mining, oil and natural resource extraction, heavy truck, marine, rail and train, packaging, food and beverage, packaging and canning, wind, and general industrial markets through its direct sales force, as well as a network of industrial and aerospace distributors. The company was founded in 1919 and is headquartered in Oxford, Connecticut.

How the Company Makes Money

RBC Bearings generates revenue through the manufacturing and sale of its precision bearings and components, which are integral to the function of a broad spectrum of machinery and equipment. The company's key revenue streams include sales to original equipment manufacturers (OEMs) and aftermarket clients across diverse industries such as aerospace, defense, and industrial machinery. RBC's strategic partnerships and long-term contracts with leading industry players also significantly contribute to its earnings. By focusing on high-performance products and maintaining strong relationships with its clients, RBC is able to secure a stable revenue base in both domestic and international markets.

RBC Bearings Financial Statement Overview

Summary

RBC Bearings presents a strong financial profile with consistent revenue growth, solid profitability margins, and a stable balance sheet. The company effectively manages cash flows, supporting its ongoing operations and growth strategies. While the financial statements reflect robust health, there is potential for further enhancement in profit margins and asset utilization.

Income Statement

RBC Bearings demonstrates strong revenue growth with a notable increase in net income over recent years. The company maintains healthy gross and EBIT margins, reflecting operational efficiency. There is consistent improvement in EBITDA margin, indicating solid earnings before non-operating expenses. These factors contribute to a high score, although there is room for improvement in net profit margin.

Balance Sheet

The balance sheet is robust with a favorable debt-to-equity ratio, indicating manageable leverage levels. The equity ratio is strong, underscoring a solid foundation of stockholder equity relative to total assets. ROE shows efficient use of equity, although there is potential for further enhancement. Overall, financial stability is well-maintained, but there's a slight caution on asset growth.

Cash Flow

RBC Bearings exhibits a positive trend in operating cash flow, with a high operating cash flow to net income ratio, highlighting effective cash generation relative to earnings. Free cash flow growth is commendable, supporting investment and financial flexibility. However, the free cash flow to net income ratio indicates an opportunity to optimize free cash generation against net earnings.

Breakdown
TTM	Mar 2024	Jun 2023	Mar 2022	Mar 2021	Mar 2020
Income Statement		Total Revenue
1.61B	1.56B	1.47B	942.94M	608.98M	727.46M
	Gross Profit
675.58M	670.50M	604.75M	357.07M	234.11M	289.10M
	EBIT
366.57M	342.20M	170.97M	63.70M	78.75M	124.60M
	EBITDA
483.85M	459.80M	409.00M	185.79M	144.23M	181.55M
	Net Income Common Stockholders
235.10M	209.90M	166.70M	42.70M	90.10M	120.35M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
60.60M	63.50M	65.40M	182.86M	241.34M	103.25M
	Total Assets
4.67B	4.68B	4.69B	4.85B	1.43B	1.32B
	Total Debt
1.05B	1.29B	1.44B	1.74B	51.81M	52.12M
	Net Debt
993.80M	1.22B	1.38B	1.55B	-99.27M	-51.14M
	Total Liabilities
1.73B	1.93B	2.15B	2.47B	204.31M	203.91M
	Stockholders Equity
2.94B	2.75B	2.54B	2.37B	1.23B	1.12B
Cash Flow		Free Cash Flow
258.80M	241.50M	178.60M	150.53M	140.68M	118.32M
	Operating Cash Flow
303.90M	274.70M	220.60M	180.29M	152.45M	155.62M
	Investing Cash Flow
-45.10M	-52.20M	-14.00M	-2.85B	-101.52M	-62.78M
	Financing Cash Flow
-267.80M	-223.50M	-322.80M	2.70B	-3.36M	-20.37M

RBC Bearings Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 381.22
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RBC, the sentiment is Positive. The current price of 381.22 is above the 20-day moving average (MA) of 369.94, above the 50-day MA of 345.13, and above the 200-day MA of 323.68, indicating a bullish trend. The MACD of 9.03 indicates Negative momentum. The RSI at 68.62 is Neutral, neither overbought nor oversold. The STOCH value of 84.18 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for RBC.

RBC Bearings Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
RBC	77 Outperform	$12.00B	49.64	8.51%	―	4.87%	19.66%
LECO	77 Outperform	$11.25B	24.86	34.83%	1.45%	-2.29%	-14.49%
SNA	75 Outperform	$16.82B	16.83	19.15%	2.57%	-0.88%	0.04%
TKR	74 Outperform	$5.02B	15.49	11.85%	1.91%	-3.69%	-11.76%
KMT	71 Outperform	$1.67B	15.85	8.69%	3.65%	-2.93%	2.74%
SWK	66 Neutral	$10.23B	28.09	4.03%	4.94%	-3.04%	―
Sector *	66 Neutral	$4.50B	12.29	5.40%	248.66%	4.13%	-12.33%

RBC Bearings Corporate Events

RBC Bearings to Acquire VACCO Industries for $310M

RBC Bearings Incorporated has announced a definitive agreement to acquire VACCO Industries from ESCO Technologies for $310 million in cash. VACCO, based in South El Monte, California, specializes in manufacturing valves, manifolds, regulators, filters, and other precision components for space and naval defense applications. The acquisition, expected to close in the summer of 2025 pending regulatory approval, will be financed through RBC’s existing credit agreement and cash on hand. This strategic move aims to expand RBC’s product breadth and capacity in its rapidly growing space and naval defense channels, enhancing its design, engineering, and manufacturing capabilities to better serve customer needs.

The most recent analyst rating on (RBC) stock is a Hold with a $276.00 price target. To see the full list of analyst forecasts on RBC Bearings stock, see the RBC Stock Forecast page.