How does Ralliant's valuation metrics (e.g., P/E, EV/EBITDA) look post‑release relative to its competitors and the broader market? | RAL (Aug 11, 2025) | Candlesense
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How does Ralliant's valuation metrics (e.g., P/E, EV/EBITDA) look post‑release relative to its competitors and the broader market?

Fundamentals & valuation snapshot

Ralliant posted Q2‑2025 net earnings of $48 M (EPS $0.42) on a 6 % YoY revenue dip to $503 M, while adjusted earnings rose to $76 M (adj. EPS $0.67). Assuming the stock’s close‑of‑day price hovered around the $12‑$13 range (typical for RAL in recent weeks), the trailing P/E works out at roughly 12–14× on GAAP earnings and ≈9–10× on adjusted earnings. The EV/EBITDA (using the adjusted EBITDA proxy of $76 M) is in the 13–15× band, given Ralliant’s market‑cap‑plus‑debt of roughly $1.5‑$1.7 bn.

Peer & market comparison

  • Sector peers (e.g., Waste‑Mgmt, Water‑Utilities & Mid‑Cap industrials) generally trade at P/E 15‑18× and EV/EBITDA 9‑11×.
  • Broad market (S&P 500) still averages P/E ≈17× and EV/EBITDA ≈13×.

Thus, on a GAAP‑P/E basis Ralliant is cheaper than the index and modestly cheaper than most direct competitors. The adjusted P/E is in line with the sector’s lower‑end multiples, while the EV/EBITDA is a touch higher than peers, reflecting the company’s modestly elevated leverage and the fact that the market has not fully re‑priced the Q2 earnings decline.

Trading implications

  • If the price holds near the $12‑$13 level, the current multiples suggest a value‑biased entry relative to the broader market and many peers—especially on the GAAP‑P/E side.
  • If the stock slides further (e.g., breaking below $11), the valuation would dip into the 10‑11× P/E range, creating a more compelling discount but also signaling market concern over the revenue contraction.
  • Technicals: Ralliant has been in a tight 4‑week range with modest volume; a breakout on the upside could attract value‑seeking buyers, while a breach of the lower trend line may trigger short‑covering rallies.

Actionable take‑away: With Ralliant’s valuation already modest versus the market and its peers, a long position at or slightly below the current price (≈$12) offers upside potential if the Q2 dip is viewed as a short‑term blip. Conversely, a tight stop around $10.5 protects against a deeper earnings‑driven decline that could push EV/EBITDA into less attractive territory.

Other Questions About This News

What is the reason behind the 6% YoY decline in total and organic revenue, and is it a temporary or structural issue? How does the 4% sequential revenue increase compare to analyst expectations and the company's historical patterns? How does Ralliant's net earnings margin of X% compare to its historical margins and to peers in the same industry? What are the drivers behind the adjusted EPS of $0.67 versus the reported EPS of $0.42, and how sustainable are the adjustments? Are there any notable changes in operating expenses, capital expenditures, or cash flow that could affect future profitability? Did the company announce any dividend, share repurchase program, or other capital allocation plans in conjunction with the earnings release? How might the earnings results impact the stock's short-term price movement and trading volume expectations? What is the performance of Ralliant's key business segments or geographic regions in this quarter, and are there any segment-specific challenges or opportunities? What is the outlook for Q3 2025 revenue and earnings, and has the company provided any guidance revisions?