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RBC Bearings (RBC)
NYSE:RBC

RBC Bearings (RBC) AI Stock Analysis

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RBC Bearings

(NYSE:RBC)

Rating:77Outperform
Price Target:
$408.00
▲(6.97%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
Expansion and Market Share
RBC Bearings is expanding its capacity to meet the increasing demand in commercial aerospace, which indicates potential market share gains in an undersupplied market.
Financial Performance
RBC once again displayed the counter-cyclicality of its portfolio, outperforming industrial peers with building momentum across nearly all facets of the business looking into fiscal 2026 and beyond.
Strategic Acquisitions
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.
Cash Flow Concerns
RBC reported operating cash flow of $69mn, below consensus of $160mn and below MSe of $117mn.

RBC Bearings (RBC) vs. SPDR S&P 500 ETF (SPY)

RBC Bearings Business Overview & Revenue Model

Company DescriptionRBC 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 MoneyRBC 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 Earnings Call Summary

Earnings Call Date:May 16, 2025
(Q4-2025)
|
% Change Since: 3.86%|
Next Earnings Date:Jul 31, 2025
Earnings Call Sentiment Positive
The earnings call presented a generally positive outlook with strong revenue growth, improved margins, and successful debt reduction efforts. However, there were challenges such as industrial segment contraction and macroeconomic headwinds. The company's guidance for fiscal 2026 remains optimistic, particularly in the A&D segment.
Q4-2025 Updates
Positive Updates
Strong Revenue Growth
Fourth quarter sales reached $438 million, representing a 5.8% increase over the previous year. The A&D segment saw a 10.6% year-over-year increase, with commercial aerospace growing 11.6% and defense growing 8.2%.
Improved Gross Margin
Consolidated gross margin for the quarter was 44.2%, up from 43.1% the previous year. Industrial gross margins were 45.7%, and A&D margins were 41.5%.
Significant EPS Growth
Adjusted diluted EPS increased to $2.83, a 14.6% rise from the previous year's $2.47.
Debt Reduction Success
The company allocated $275 million to debt repayment in fiscal 2025, reducing trailing net leverage to 1.7 turns.
Positive Outlook for Fiscal 2026
The company expects at least 15% growth in commercial aerospace and mid-to-high single-digit growth in defense for fiscal 2026.
Negative Updates
Challenges in Industrial Segment
Despite a 3.3% growth in the industrial segment, the broader industrial economy has seen two consecutive years of contraction.
Free Cash Flow Decline
Free cash flow in the quarter was $55 million, with a conversion rate of 76%, compared to $70 million and 113% conversion last year.
Macroeconomic and Supply Chain Challenges
The company faced challenges such as FAA production constraints, a prolonged strike at its largest customer, and macroeconomic softness in the industrial economy.
Company Guidance
During RBC Bearings' fiscal fourth-quarter 2025 earnings call, the company reported strong financial performance, with sales reaching $438 million, a 5.8% increase year-over-year. The consolidated gross margin improved to 44.2% from 43.1% the previous year, and adjusted diluted EPS rose 14.6% to $2.83 per share. The Aerospace and Defense (A&D) segment saw a significant sales increase of 10.6%, with commercial aerospace growing by 11.6% and defense by 8.2%. The industrial segment also experienced growth, with a 3.3% year-over-year increase. RBC Bearings achieved an adjusted EBITDA of $139.8 million and an adjusted EBITDA margin of 31.9%, reflecting a 50-basis-point improvement from the previous year. The company reduced its net leverage to 1.7 turns by allocating $275 million to debt repayment throughout fiscal 2025, positioning it well for potential mergers and acquisitions. Looking ahead to fiscal 2026, RBC Bearings anticipates at least 15% growth in commercial aerospace and mid-to-high single-digit growth in defense, while projecting revenues between $424 million and $434 million for the first quarter.

RBC Bearings Financial Statement Overview

Summary
RBC Bearings has shown remarkable financial performance with substantial revenue and profit growth, improved margins, and a strengthened balance sheet. The company has effectively managed its leverage, enhancing profitability and cash flow generation.
Income Statement
85
Very Positive
RBC Bearings has demonstrated strong revenue growth over the past few years, with a notable increase from $942.9 million in 2022 to $1.64 billion in 2025. The gross profit margin has shown stability around 44%, indicating effective cost management. Net profit margin increased from 4.5% in 2022 to 15.0% in 2025, reflecting improved profitability. The EBIT margin also improved significantly from 6.8% in 2022 to 22.6% in 2025. These metrics reflect solid financial performance and operational efficiency.
Balance Sheet
78
Positive
The company's debt-to-equity ratio has decreased from 0.73 in 2022 to 0.34 in 2025, indicating a reduction in leverage and a more stable financial position. Return on equity improved from 1.8% in 2022 to 8.1% in 2025, showcasing better profitability relative to shareholder equity. However, the equity ratio has decreased slightly, suggesting a moderate increase in liabilities relative to assets. Overall, RBC has strengthened its balance sheet with lower leverage and improved returns for shareholders.
Cash Flow
80
Positive
RBC Bearings has shown strong cash flow performance, with free cash flow growing consistently from $150.5 million in 2022 to $243.8 million in 2025. The operating cash flow to net income ratio has remained healthy, indicating efficient conversion of net income to cash. The free cash flow to net income ratio also improved, highlighting effective cash management and reinvestment strategies. These metrics demonstrate robust cash flow generation and financial flexibility.
BreakdownMar 2025Mar 2024Jun 2023Mar 2022Mar 2021
Income Statement
Total Revenue1.64B1.56B1.47B942.94M608.98M
Gross Profit726.10M670.50M604.75M357.07M234.11M
EBITDA491.70M459.80M409.00M185.79M144.23M
Net Income246.20M209.90M166.70M42.70M90.10M
Balance Sheet
Total Assets4.69B4.68B4.69B4.85B1.43B
Cash, Cash Equivalents and Short-Term Investments36.80M63.50M65.40M182.86M241.34M
Total Debt1.03B1.29B1.44B1.74B51.81M
Total Liabilities1.65B1.93B2.15B2.47B204.31M
Stockholders Equity3.03B2.75B2.54B2.37B1.23B
Cash Flow
Free Cash Flow243.80M241.50M178.60M150.53M140.68M
Operating Cash Flow293.60M274.70M220.60M180.29M152.45M
Investing Cash Flow-49.80M-52.20M-14.00M-2.85B-101.52M
Financing Cash Flow-270.40M-223.50M-322.80M2.70B-3.36M

RBC Bearings Technical Analysis

Technical Analysis Sentiment
Positive
Last Price381.43
Price Trends
50DMA
361.21
Positive
100DMA
351.94
Positive
200DMA
330.25
Positive
Market Momentum
MACD
5.71
Positive
RSI
56.97
Neutral
STOCH
63.95
Neutral
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 381.43 is above the 20-day moving average (MA) of 377.66, above the 50-day MA of 361.21, and above the 200-day MA of 330.25, indicating a bullish trend. The MACD of 5.71 indicates Positive momentum. The RSI at 56.97 is Neutral, neither overbought nor oversold. The STOCH value of 63.95 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for RBC.

RBC Bearings Risk Analysis

RBC Bearings disclosed 10 risk factors in its most recent earnings report. RBC Bearings reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

RBC Bearings Peers Comparison

Overall Rating
UnderperformOutperform
Sector (65)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
RBRBC
77
Outperform
$12.01B49.668.51%4.87%19.66%
77
Outperform
$11.74B25.9434.83%1.45%-2.29%-14.49%
TKTKR
74
Outperform
$5.28B16.2811.85%1.93%-3.69%-11.76%
SNSNA
72
Outperform
$16.26B16.2819.15%2.75%-0.88%0.04%
SWSWK
72
Outperform
$10.47B28.734.03%4.84%-3.04%
KMKMT
71
Outperform
$1.83B17.308.69%3.48%-2.93%2.74%
65
Neutral
$10.65B15.495.57%1.97%2.71%-26.32%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
RBC
RBC Bearings
381.43
107.48
39.23%
KMT
Kennametal
23.94
1.72
7.74%
LECO
Lincoln Electric Holdings
210.22
27.35
14.96%
SNA
Snap-on
317.86
67.47
26.95%
SWK
Stanley Black & Decker
70.41
-6.34
-8.26%
TKR
Timken Company
75.44
-3.07
-3.91%

RBC Bearings Corporate Events

M&A TransactionsBusiness Operations and Strategy
RBC Bearings to Acquire VACCO Industries for $310M
Positive
May 20, 2025

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.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: May 23, 2025