RBA

We rate RB GLOBAL INC. (RBA) as a Reduce with a composite score of 49.6/100 at a current price of $97.00. The quantitative profile shows weakness across multiple dimensions, suggesting limited upside potential and elevated risk of underperformance relative to peers over the next 12 months.

The rating is primarily driven by strength in stability (83th percentile) and momentum (69th percentile), which together account for the majority of the composite score. Offsetting weakness in investment (40th percentile) and quality (41th percentile) tempers our overall conviction. We assign a No Moat rating (33/100), Low uncertainty, and Poor capital allocation.

Key items to watch: whether strong momentum is fundamentally supported by revenue trends. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.

RB GLOBAL INC. holds a top-quartile position (#0 of 50) within the Services sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 49.6/100 places it at rank #2076 in our full 7,333-stock universe. With a $20.1B market capitalization, RB GLOBAL INC. operates at meaningful scale within the Services sector, providing competitive advantages in distribution, procurement, and customer reach.

Despite positive momentum (69th percentile), revenue contraction of -0% creates a divergence between price action and fundamental trajectory. This divergence suggests either that the market is looking through near-term weakness or that technical factors are temporarily inflating the stock. Investors should assess whether the revenue decline reflects cyclical weakness or structural challenges.

The margin cascade tells an important story: gross margins of 46% (-13.6pp vs sector) narrow to operating margins of 16% (+12.3pp vs sector) and net margins of 9.0%, yielding a gross-to-net conversion rate of 20%. This conversion rate is typical for the sector, suggesting a standard cost structure without notable efficiency advantages or disadvantages.

At a current price of $97.00, RB GLOBAL INC. is trading near fair value based on current fundamentals. Our value factor score of 55/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. Valuation metrics are mixed, with no strong signal of mispricing in either direction.

The stock currently trades at a P/E of 48.7x (a 105% premium to the sector median of 23.7x), EV/EBITDA of 31.6x (at a premium), P/B of 3.5x, P/S of 4.4x. The above-sector P/E multiple suggests the market is pricing in superior growth or quality, which our analysis finds only partially justified by current fundamentals.

We assign a Low uncertainty rating to RB GLOBAL INC.. The company exhibits strong financial stability with a beta of 0.70, conservative leverage (47% D/E), and a stability factor in the 83th percentile. The predictable nature of the business model and solid financial position reduce the range of potential outcomes, giving us confidence in our fair value estimate.

Specific risk factors that inform our assessment include: elevated valuation multiple (P/E 48.7x) that leaves limited margin for error. Each of these factors independently widens the distribution of potential outcomes, and in combination they create a risk profile that demands careful position sizing. The stability factor at the 83th percentile and quality factor at the 41th percentile provide a quantitative summary of the overall risk landscape.

Key risk mitigants include: healthy gross margins of 46% provide a buffer against cost pressures; above-average stability (83th percentile) suggests predictable business dynamics. These factors partially offset the identified risks and provide downside protection in adverse scenarios. On balance, the risk-reward profile is favorable for long-term investors.

We rate RB GLOBAL INC.'s capital allocation as Poor. Key concerns include suboptimal returns on capital. Exemplary capital allocators generate ROE above 20% and maintain conservative leverage — RB GLOBAL INC. significantly underperforms these benchmarks, raising questions about management's ability to create shareholder value.

Investors should scrutinize management's reinvestment decisions and balance sheet trajectory before committing capital. Poor capital allocation often compounds over time: overlevered balance sheets limit strategic flexibility, while low returns on capital destroy shareholder value. We would need to see sustained improvement in profitability metrics and balance sheet discipline before considering an upgrade.

In summary, RB GLOBAL INC. receives a Reduce rating with a composite score of 49.6/100 (rank #2076 of 7,333). Our quantitative framework assigns a No Moat (33/100, trend: stable), Low uncertainty, and Poor capital allocation. The average factor score across quality, value, momentum, stability, and investment is 58/100.

Our analysis does not support a constructive view on RB GLOBAL INC. at this time. The combination of limited competitive advantages, low uncertainty, and poor capital allocation suggests unfavorable risk-reward at current levels. We recommend investors avoid new positions and existing holders consider reducing exposure.