RBC Bearings (RBC) AI Stock Analysis

• Market Cap: $11.45B
• Dividend Yield: N/A
• Average Volume (3M): 177.88K
• Price to Earnings (P/E): 50.0
• Beta (1Y): 0.98
• Revenue Growth: 4.62%
• EPS Growth: 21.58%
• Country: US
• Employees: 5,302
• Sector: Industrials
• Sector Strength: 90
• Industry: Manufacturing - Tools & Accessories
• EPS (TTM): 2.34
• Shares Outstanding: 31,444,244
• 10 Day Avg. Volume: 125,382
• 30 Day Avg. Volume: 177,879
• 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: 1.05
• Enterprise Value/Revenue: 1.89
• Enterprise Value/Gross Profit: 17.73
• Enterprise Value/Ebitda: 6.34
• 1Y Price Target: $386.67
• Price Target Upside: 4.51% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4

RBC Bearings achieves a strong financial performance score due to consistent revenue growth, profitability, and effective cash flow management. The earnings call further supports a positive outlook with notable growth in key segments. However, the high P/E ratio suggests potential overvaluation, and technical indicators reveal mixed short-term momentum. These factors combine to result in an overall score of 73.

Positive Factors

Financial Performance

Management execution remains strong as gross margins expanded.

Market Positioning

RBC is well positioned to capitalize on low-hanging market share, selectively bidding on higher volume, more profitable opportunities.

Negative Factors

Financial Outlook

RBC noted it was able to mitigate headwinds from the Boeing strike with strong demand from other customers and it expects to continue to do so in 3QFY25.

Operating Performance

RBC reported operating cash flow of $43mn, below consensus of $130mn by 67% and below MSe of $53mn by 18.9%.

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 primarily through the manufacturing and sale of precision bearings and related components. The company's key revenue streams include sales to original equipment manufacturers (OEMs) and the aftermarket sector. RBC's products are essential in the aerospace and defense industries, contributing significantly to its earnings. Additionally, RBC benefits from long-term relationships and partnerships with strategic customers in various sectors, ensuring a steady demand for its products. The company also invests in research and development to innovate and maintain a competitive edge in producing high-performance bearings, which supports its pricing power and profitability.

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: 370.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• 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 370 is above the 20-day moving average (MA) of 335.47, above the 50-day MA of 334.19, and above the 200-day MA of 315.82, indicating a bullish trend. The MACD of 7.85 indicates Negative momentum. The RSI at 71.93 is Negative, neither overbought nor oversold. The STOCH value of 91.40 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
LECO	76 Outperform	$10.88B	24.05	34.83%	1.50%	-2.29%	-14.49%
RBC	73 Outperform	$11.45B	49.98	8.35%	―	4.62%	21.58%
SNA	71 Outperform	$17.10B	17.11	19.15%	2.45%	-0.88%	0.04%
TKR	69 Neutral	$5.09B	15.71	11.85%	1.87%	-3.69%	-11.76%
KMT	69 Neutral	$1.67B	15.84	8.69%	3.65%	-2.93%	2.74%
SWK	66 Neutral	$9.70B	26.62	4.03%	4.51%	-3.04%	―
Sector *	64 Neutral	$4.38B	12.03	5.25%	249.91%	4.11%	-11.02%