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Valuation · EV/EBITDA model

Is Regal Rexnord (RRX) stock undervalued?

Brief Equity's quick EV/EBITDA model of Regal Rexnord, dated October 12, 2026, puts the shares at about $253 for 2028, against a price of $165.03 that day. On those assumptions Regal Rexnord looks cheap, with a return of about 53%. The estimate rests on one condition: that the data center power orders in the company's backlog ship in 2027 and the exit multiple holds.

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By The Brief Equity Team · Model dated · Published

Brief Equity valuation model card for Regal Rexnord (RRX): an EV/EBITDA exit model with projected revenue, EBITDA and margins to 2028 and a target for 2028.
The Regal Rexnord model card as captured on October 12, 2026: the target, the share price at that date and the projection behind them.

The model's assumptions for Regal Rexnord

Regal Rexnord's fiscal year is the calendar year. The figures below come from a quick model, built on a small set of stated assumptions and projected to 2028. Analyst consensus revenue is shown beside the model's revenue for the same three years.

Regal Rexnord: model assumptions, 2026 to 2028 (revenue and EBITDA in $ billions)
202620272028
Revenue, model6.207.077.49
Revenue growth, model4.5%14.0%6.0%
EBITDA, model1.241.411.50
EBITDA margin, model20.0%20.0%20.0%
Regal Rexnord: model revenue and analyst consensus revenue, 2026 to 2028 ($ billions)
202620272028
Revenue, model6.207.077.49
Revenue, analyst consensus6.197.067.44

Why Regal Rexnord looks undervalued

Regal Rexnord looks cheap at a share price in the 160s, and cheaper still for an investor who expects humanoid robots to become a large market for its motion products over the long term.

Regal Rexnord's shares first reached their current price in November 2021. In March 2023 the company bought Altra Industrial Motion for a total purchase price of $5.1 billion, a deal it said made it a global provider of automation solutions.

Regal Rexnord's orders are now growing faster than its sales. Daily orders rose 8.8% in the second quarter of 2026 while sales rose 3.3% on an organic basis. Backlog was $2,536.0 million at the end of 2025, compared with $1,707.0 million a year earlier.

Regal Rexnord's backlog includes orders worth about $735 million for its data center power modules, won in the fourth quarter of 2025. On the May 2026 earnings call, management said it expects data center sales of $180 million in 2026 and $900 million or more in 2027, and added that it was not yet giving guidance for 2027.

The model of Regal Rexnord is a quick one. It has revenue growing 4.5% in 2026, which matches the company's guidance, then 14.0% in 2027 as those orders ship and 6.0% in 2028, with the EBITDA margin held at 20.0%. Valuing the company at 12.7 times EBITDA in 2028 gives about $253 a share, about 53% above the price on the model's date. Analysts expect revenue to grow 7.8% a year from 2025 to 2028, and the model's growth over the same period is 8.1% a year.

Regal Rexnord's margin is the main risk to this view. The data center modules are targeted at an adjusted EBITDA margin of about 20%, below the mid-20s the company expects from that segment over the longer term, and management lowered its 2026 margin guidance on each of its last two earnings calls. Total debt was $4,611.8 million at June 30, 2026. Interest expense was $349.2 million in 2025, against income from operations of $680.8 million.

Regal Rexnord's humanoid robot orders remain small. Management put them at $40 million in 2025 and a little over $1 million in the first quarter of 2026, although the company's motion brands make motors, drives, brakes and gears for robot joints.

“And those markets will develop slowly until they happen overnight, and we plan to be ready.”

Aamir Paul, Chief Executive Officer, Regal Rexnord second-quarter 2026 earnings call, August 5, 2026

Regal Rexnord therefore looks cheap if the data center orders ship in 2027 and the exit multiple holds. Any growth from humanoid robots would come in addition to that estimate.

What has to be true, and what would break it

Regal Rexnord looks cheap on this model only if a few things hold, and the view fails if they do not.

What has to be true

  • The data center orders in the backlog ship in 2027, as the company expects.
  • The EBITDA margin stays near 20% as data center work grows.
  • Investors pay 12.7 times EBITDA for the company in 2028.

What would break it

  • Data center shipments move out of 2027, or no further orders arrive to fill 2028.
  • Costs keep rising faster than prices and the margin falls below 20%.
  • Debt and interest costs lead investors to pay a lower multiple for the shares.

The parts of Regal Rexnord's business

Regal Rexnord reports three segments. Automation and data center power both sit inside Automation & Motion Control, the segment the model's 2027 growth depends on.

Regal Rexnord by part, 2025 against 2024
Share of revenue
Industrial Powertrain Solutions43.7%
Automation & Motion Control28.5%
Power Efficiency Solutions27.8%

Regal Rexnord beside its peers

Regal Rexnord is compared here with ten companies, chosen to cover each of its three segments and its data center power business.

  • TKR: Industrial powertrain
  • GTES: Industrial powertrain
  • RBC: Industrial powertrain
  • ROK: Automation and motion control
  • PH: Automation and motion control
  • AME: Automation and motion control
  • ETN: Data center power and switchgear
  • VRT: Data center power and switchgear
  • POWL: Data center power and switchgear
  • FELE: Motors for HVAC and pool
Peer comparison table for Regal Rexnord (RRX) and ten peers, with each company's valuation multiples, revenue growth and margin.
Regal Rexnord beside its ten peers on trailing multiples, as captured on October 12, 2026.

How the estimate moves with its assumptions

The estimate for Regal Rexnord depends on its assumptions, and the two pictures below show how far it moves when they change. The first varies two assumptions at a time. The second runs the model many times with growth, margin and the exit multiple varied at random.

Sensitivity grids for Regal Rexnord (RRX): the per-share value as revenue growth, EBITDA margin, the exit multiple, the discount rate and terminal growth change.
How the Regal Rexnord estimate changes when two assumptions move together. The exit grids are discounted to today's dollars.
Monte Carlo distribution of per-share outcomes for Regal Rexnord (RRX), with the share price at the model's date and the median outcome marked.
The spread of outcomes for Regal Rexnord when growth, margin and the exit multiple vary at random.

Questions about Regal Rexnord

These questions about Regal Rexnord (RRX) are answered from the documents listed under Sources.

When did Regal Rexnord acquire Altra Industrial Motion?
Regal Rexnord completed the acquisition of Altra Industrial Motion on March 27, 2023, in an all cash transaction for $62.00 per share.
How much debt does Regal Rexnord have?
Regal Rexnord reported total debt of $4,611.8 million at June 30, 2026, compared with $4,788.7 million at December 31, 2025.
How large are Regal Rexnord's humanoid robot orders?
Management said on the May 2026 earnings call that humanoid orders were $40 million in 2025 and a little over $1 million in the first quarter of 2026.

Sources

The quotations and facts about Regal Rexnord (RRX) on this page rest on the documents below.

About this page

Brief Equity and its team hold no position in Regal Rexnord (RRX) as of October 12, 2026.

This page is research, not investment advice. It describes one model and the assumptions behind it, and market data is delayed. Read how these models are built and our editorial policy.

Related guides: EV/EBITDA explained, What is enterprise value (EV), How to build a DCF model (step by step).

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