Regal Rexnord Corporation (NYSE:RRX) received a lot of attention from a substantial price increase on the NYSE over the last few months. The recent share price gains has brought the company back closer to its yearly peak. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company's outlook is already priced into the stock. However, what if the stock is still a bargain? Let's examine Regal Rexnord's valuation and outlook in more detail to determine if there's still a bargain opportunity.

Is Regal Rexnord Still Cheap?

Great news for investors – Regal Rexnord is still trading at a fairly cheap price. Our valuation model shows that the intrinsic value for the stock is $241.42, but it is currently trading at US$172 on the share market, meaning that there is still an opportunity to buy now. However, given that Regal Rexnord's share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.

Can we expect growth from Regal Rexnord?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let's also take a look at the company's future expectations. With revenues expected to grow by a double-digit 13% over the next couple of years, the outlook is positive for Regal Rexnord. If the level of expenses is able to be maintained, it looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What This Means For You

Are you a shareholder? Since RRX is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With an optimistic outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.

Are you a potential investor? If you've been keeping an eye on RRX for a while, now might be the time to make a leap. Its prosperous future outlook isn't fully reflected in the current share price yet, which means it's not too late to buy RRX. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed buy.

If you'd like to know more about Regal Rexnord as a business, it's important to be aware of any risks it's facing. While conducting our analysis, we found that Regal Rexnord has 1 warning sign and it would be unwise to ignore this.

If you are no longer interested in Regal Rexnord, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.