Regal Rexnord Corporation Common Stock (RRX)

FairStock Score: 36/100 — MIXED

Key Financials

Strengths

• Generates $852 million in annual free cash flow (6.0% yield on market cap)
• Strong Piotroski F-Score of 7/9 indicating robust financial health across profitability, leverage, and efficiency metrics
• Established organization with 28,700 employees providing operational scale

Concerns

• Trades significantly above Graham Number ($99) with negative 116% margin of safety—limited downside protection
• Altman Z-Score of 1.7 places it in the financial distress zone—elevated bankruptcy risk

AI Analysis

Regal Rexnord Corporation Common Stock is a mid-cap industrials company valued at $14.2 billion. The business generates $5.9 billion in annual revenue with a 1.1% net margin and $852 million in free cash flow. From a quality standpoint, Regal shows solid Piotroski F-Score of 7/9 and distressed Altman Z-Score of 1.7 warrants caution. On valuation, the stock is commanding a steep 50.8x multiple, with trades far above its Graham Number ($99) with no margin of safety. Growth dynamics show revenue growing at 4.3% and profit growth of 54.4%. Our composite FairStock Score of 36/100 reflects below-average fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

Improving fundamentals and sector tailwinds could drive meaningful earnings growth, compressing the effective multiple for patient investors. With $852 million in annual free cash flow (6.0% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

At 51x earnings, any growth disappointment triggers rapid multiple compression—a 20% earnings miss plus multiple contraction to 20x implies 40%+ downside. Sluggish 4% growth in a large-cap company leaves the stock vulnerable to de-rating if the market rotates toward higher-growth opportunities.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer