Rb Global Inc. (NYSE: RBA)

Sector: Industrials Industry: Specialty Business Services CIK: 0001046102
Market Cap 19.20 Bn
P/B 3.50
P/E 49.09
P/S 4.24
ROIC (Qtr) 6.68
Div Yield % 0.84
Rev 1y % (Qtr) 11.30
Total Debt (Qtr) 4.21 Bn
Debt/Equity (Qtr) 0.77
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About

RB Global Inc., often recognized by its stock symbol RBA, operates as a prominent global marketplace in the automotive, construction, and commercial transportation sectors. At the heart of its business are transaction solutions, marketplace services, technology solutions, and market data intelligence. The company facilitates the sale of damaged or low-value vehicles in the automotive segment, offers transaction solutions for construction equipment in the construction segment, and provides technology solutions for the commercial transportation sector. RB...

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Investment thesis

Bull case

  • Healthy cash reserves of 753.30M provide 3.03x coverage of short-term debt 249M, demonstrating strong liquidity position and minimal refinancing risk.
  • Operating cash flow of 907.50M provides strong 11.12x coverage of stock compensation 81.60M, indicating sustainable incentive practices.
  • Robust free cash flow of 549.10M exceeds capital expenditure of 358.40M by 1.53x, indicating strong organic growth funding capability.
  • Operating cash flow of 907.50M fully covers other non-current liabilities 778.30M by 1.17x, showing strong long-term stability.
  • Robust tangible asset base of 5.03B provides 14.25x coverage of working capital 353.10M, indicating strong operational backing.

Bear case

  • Operating cash flow of 907.50M barely covers its investment activities of (557.30M), with a coverage ratio of -1.63, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 907.50M provides thin coverage of dividend payments of (219.10M) with a -4.14 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Cash reserves of 753.30M provide limited coverage of acquisition spending of (172.20M), which is -4.37x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • High receivables of 697.60M relative to inventory of 120.90M (5.77 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.
  • Operating earnings of 759.40M show weak coverage of depreciation charges of 629.40M, with a 1.21 ratio indicating high capital intensity and potential reinvestment needs.

Product and Service Breakdown of Revenue (2024)

Geographical Breakdown of Revenue (2024)

Peer comparison

Companies in the Specialty Business Services
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 CTAS Cintas Corp 120.08 Bn 556.91 33.85 3.24 Bn
2 RELX Relx Plc 56.19 Bn 20.01 4.34 9.82 Bn
3 TRI Thomson Reuters Corp /Can/ 37.42 Bn 24.91 5.00 2.44 Bn
4 CPRT Copart Inc 36.25 Bn 22.74 7.79 0.10 Bn
5 RBA Rb Global Inc. 19.20 Bn 49.09 4.24 4.21 Bn
6 ULS UL Solutions Inc. 14.12 Bn 43.32 4.92 0.74 Bn
7 GPN Global Payments Inc 11.52 Bn 284.78 8.66 16.20 Bn
8 ARMK Aramark 10.37 Bn 32.72 0.55 6.57 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.84 2.48
EV to Cash from Ops. EV/CFO 24.86 30.22
EV to Debt EV to Debt 5.35 31.08
EV to EBIT EV/EBIT 29.71 94.66
EV to EBITDA EV/EBITDA 16.25 18.37
EV to Free Cash Flow [EV/FCF] EV/FCF 41.09 -20.73
EV to Market Cap EV to Market Cap 1.17 178.66
EV to Revenue EV/Rev 4.98 8.12
Price to Book Value [P/B] P/B 3.50 5.37
Price to Earnings [P/E] P/E 49.09 65.19
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 1.47 -15,800.59
Dividend Payout Ratio % Div Payout % (Qtr) 41.00 10.14
Dividend per Basic Share Div per Share (Qtr) 0.87 0.35
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 29.40 7.65
Interest Coverage Int. cover (Qtr) 3.83 30.46
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -18.95 -178.22
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -4.66 155.14
Dividend Growth (1y) % Div 1y % (Qtr) -20.91 5.38
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 5.06 -34.92
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 5.82 -86.28
EBIT Growth (1y) % EBIT 1y % (Qtr) 1.35 -22.62
EBT Growth (1y) % EBT 1y % (Qtr) 11.31 -287.35
EPS Growth (1y) % EPS 1y % (Qtr) 12.77 -118.47
FCF Growth (1y) % FCF 1y % (Qtr) -29.92 -146.43
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 4.82 2.63
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.37 0.84
Cash Payout Ratio Cash Payout (Qtr) 0.18 -0.03
Cash Ratio Cash Ratio (Qtr) 0.50 1.15
Current Ratio Curr Ratio (Qtr) 1.23 4.12
Debt to Equity Ratio Debt/Equity (Qtr) 0.77 0.92
Interest Cover Ratio Int Coverage (Qtr) 3.83 30.46
Times Interest Earned Times Interest Earned (Qtr) 3.83 30.46
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 30.70 -33.89
EBIT Margin % EBIT Margin % (Qtr) 16.77 -43.32
EBT Margin % EBT Margin % (Qtr) 12.39 -44.88
Gross Margin % Gross Margin % (Qtr) 45.90 39.81
Net Profit Margin % Net Margin % (Qtr) 8.60 -41.60